What are CFDs?

CFD stands for Contracts for Difference. It is simply margined trading. When the position is closed, you pay or receive the profit or loss made on the trade.

A CFD gives you all the benefits of the underlying cash equity whilst avoiding many of the typical costs associated with dealing in the physical underlying product. CFD trading allows you to gain cost-effective, flexible and geared exposure to financial products globally.

As it is a margined product you only have to put up a fraction of the actual value of the trade you wish to do. We have introduced CFDs on indices as well as Forex onto the MetaTrader 4 platform. These can be trialled on the demo platform and it is advised that you practice trading them first if you are not familiar with the product.

Who trades in CFDs and why?

People trade in CFDs for a variety of reasons:

Some trade to speculate with a view to profiting from fluctuations in the price or value of the underlying instrument or security. For example, CFD traders may be short-term investors who are looking to profit from intra-day and overnight movements in the underlying market.

CFD traders may not wish to sell or purchase the underlying products themselves, but may instead be looking to trade on market movements in the products concerned.

Others trade CFDs to hedge their exposures to the underlying instrument. For example, CFDs can be used as a risk management tool to enable those with existing holdings of underlying shares to lock in an effective sale price for the products concerned by taking a "short" CFD position. If the price of the underlying products the investor holds falls, the short CFD positions will wholly or partly offset the losses incurred on the physical holdings.

CFDs also allow people to trade on a leveraged basis. You are able to outlay a relatively small amount (in the form of Initial Margin) to secure an exposure to the underlying product/instrument.

Warning: FX market involves significant risks, including complete possible loss of funds. Consequently trading is not suitable for all investors and traders. By increasing leverage risk increases as well.

Myfx Markets, the trading name of Morris Prime, provides you with educational resources to help you become familiar with all the trading features and tools in the trading platform. With the demo account you can test any trading strategies you wish in a risk-free environment. Please bear in mind that the results of the transactions of the practice account are virtual, and do not reflect any real profit or loss or a real trading environment, whereas market conditions may affect both the quotation and execution. FX products are leveraged products and trading FX therefore involves a high level of risk that may not be suitable for everyone. Myfx Markets recommends that you ensure that you fully understand the risks involved before making any decision concerning Myfx Markets' products. Independent advice should be sought if necessary.

Legal: Morris Prime, whose trading name is Myfx Markets, is regulated by the Financial Services Commission (FSC) of the Republic of Mauritius. The company's Category 1 Global Business No. is C115014181 and the company registration No. is C130207.

Current Disclaimer: The content of this website does not constitute a recommendation and, consequently, you should consider the information in light of your objectives, financial situation and needs before making any decision about whether to acquire any MYFX Markets' financial products. A Disclosure Document is available here or sending email to customer.service@myfxmarkets.com or by calling +64 9 889 4022, which should be considered prior to acquiring or continuing to hold CFDs. Information about our services, including our fees and charges is also available at those sources.