What Are CFDs?
Discover the flexibility of CFD trading and unlock opportunities across global markets.
Contracts for Difference Explained
A Contract for Difference (CFD) is a financial instrument that allows you to trade on the price movement of an asset without owning it. Instead of purchasing the asset itself, you enter into an agreement to exchange the difference in price between when you open and close the trade.
If the market moves in your favor, you profit from the price difference. If it moves against you, you incur a loss.
CFDs are popular because they are flexible, accessible, and available across multiple asset classes including forex, stocks, indices, commodities, and cryptocurrencies.
How CFD Trading Works
Go Long or Short
CFDs allow you to trade in both directions:
- Going Long (Buy): Profit from rising prices.
- Going Short (Sell): Profit from falling prices.
This means opportunity exists in both bullish and bearish markets.
Leverage & Margin
CFDs are typically traded using leverage.
- Leverage: Control a larger position with a smaller initial deposit.
- Margin: The capital required to open and maintain that leveraged position.
While leverage can increase potential returns, it also increases risk. Responsible risk management is essential.
Trading Costs
When trading CFDs, you should be aware of:
- Spread: The difference between buy and sell prices.
- Overnight (Swap) Fees: Charges or credits applied when positions are held overnight.
Understanding these costs helps you plan and manage trades effectively.
Profit & Loss
Your profit or loss depends on:
- The size of your position.
- The distance the market moves between entry and exit.
The greater the movement and position size, the greater the impact — positive or negative.
Hedging with CFDs
CFDs can also be used as a risk management tool.
- Hedge existing investments: Offset potential losses in your portfolio by opening an opposite CFD position.
- Hedge related markets: Manage exposure by balancing positions in correlated assets.
This flexibility makes CFDs a versatile instrument for active traders.
No Expiry, Flexible Timeframes
Unlike some traditional derivatives, CFDs typically have no fixed expiration date. You can hold positions according to your strategy — whether short-term or longer-term — while considering overnight costs.
Why Trade CFDs with Levante Markets?
Levante Markets provides a secure, regulated, and technology-driven environment for CFD trading. With access to multiple global markets, advanced platforms, transparent pricing, and dedicated support, we empower traders to operate with confidence and control.
Begin Your CFD Trading Journey
Open a live account or practice with a demo account to explore CFD trading in real market conditions.
Trade global markets. Trade flexibly. Trade with Levante Markets.