Contract for difference is an interesting trading strategy that offers some unique advantages. These contracts allow traders to speculate on the price of a stock or commodity without actually buying it.
This can be advantageous because you don’t have to pay any capital gains tax if you make a profit. CFDs are traded in increments of one point, which means they’re very low risk and high potential return options. In this blog post, I will discuss what contract for difference is and how it works!
The idea behind a contract for difference is simple: you make either an up or down payment on the value of something and then sell that thing before paying for it. You can do this because the price you paid to purchase was lower than its selling price; there’s money left over after sale (aka profit).
When trading cryptocurrencies, this can be an exciting strategy to explore.
Another example of a contract for difference is the stock market. When you purchase stocks with a margin account, you are making an up or down payment on the value of that particular company’s shares.
As always, it’s important to note that many brokers will charge fees and commissions based on how much leverage they offer with their product. So be sure to read all terms carefully before investing! This is one area where being familiar pays off big time!