CFD Trading: Potential Profits or Just Too Risky?

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If you’ve heard about CFD trading, you have probably also heard all the warnings that come with it—along with the promises that can sound very enticing and like nothing serious can go wrong. But how much do you know about CFD trading anyway? In this article, we’ll go back to the basics, explain the pros and cons of using it, and (of course) let you know where you can get started CFD trading, if you decide that this is a good type of trade for you (hint: it’s PrimeXBT). 

CFD is actually short for contract for differences. This is a type of instrument that does not require you to hold the underlying asset in order to profit off its price movements. The difference between the starting price and the closing price is cash-settled, which means that there is absolutely no exchange of other assets or physical goods. If you think an asset’s price will move upwards, you will buy that contract; if you believe it will go down, you sell an opening position. Either way, if you’re right, you pocket the change between the opening and closing price. 

Some of the benefits of CFD trading are obvious: they’re quick and not at all time-consuming, especially when it comes to trading assets that take some time to settle. Since there is no exchange of actual assets (or even their derivatives, as those can also be traded as CFDs), traders can quickly move on to new trades once their old ones are completed in order to quickly take advantage of the