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What is a contract for difference (CFD)?

A CFD is a tradable instrument that mirrors the movements of the asset (eg. shares - in the case of EasyEquities) underlying it. It allows for profits or losses to be realised when the price of the underlying asset moves in relation to the position taken, but the actual underlying asset is never owned.

Essentially, it is a contract between the client and the broker. Trading CFDs has several major advantages, and these have increased the popularity of the instruments over the last several years.

At EasyEquities, we make use of CFD's to enable our investors to take ownership of fractions of shares (Fractional Share Rights).
If you'd like to learn more about CFD's take a look at this Investopedia article.

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