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CFD
What is
CFD Trading?
CFD trading first appeared in the 1970s, and in the 1980s it was mainly concentrated between banks and large institutions. In 1999, it officially traded in the overseas retail market. In 2000, British stock CFD was launched in the UK. CFD is an emerging financial derivative that is traded at the price of a commodity and does not involve the transaction of the commodity entity. This is investment behavior of calculation of the difference between the opening and closing value of the commodity.
Characteristics
Margin Trading
Tradable in Rising and Falling Markets
T+0 Trading Mode
Powerful Leverage Trading Model>
High Market Volatility and High Return
How to trade CFD ?
There are many types of CFD trading. GLORY TRADE uses index CFDs as an example to give traders a simple demonstration of index CFD margin & profit and loss calculations so that investors can have a clearer understanding of CFDs.
The formula for CFD margin calculation is:
Lots × Contract Quantity × Market Price × Prepayment Percentage = Margin
Example:
U30USD (Dow Jones Industrial Average) has a contract volume of 10, the current index is 20000.0, and the prepayment percentage is 1%, then the margin for trading 1 lot of U30USD is: 1 × 10 × 20000.0 × 1% = 2000 USD
Calculation Method of CFD profit and loss:
(Closing Price – Opening Price) × Contract Amount × Lot Size = Profit and Loss
Example:
In the above example, if the entrance price is 20000.0 and the exit price is 20001.0,
the profit is: (20001.0 – 20000.0) × 1 × 10 = 10 USD
Through the above example, investors would have a certain understanding of GLORY TRADE' index CFD margin & profit and loss calculation method, and can judge whether it needs to invest in CFD trading according to their own situation.

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