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Glossary

What is a CFD

What a CFD is, how it differs from buying the share and what to keep in mind when trading it.

A CFD (contract for difference) is a contract with your broker that tracks the price of an asset, such as a share, without you actually buying it. You win or lose the difference between the opening and closing price.

It usually allows leverage: with little money you move a larger position. That multiplies gains and also losses, which can come very fast.

Compared with buying the share: you are not a shareholder, the broker charges a cost for holding the position overnight and the price may differ slightly from the exchange price.

Most retail clients lose money trading CFDs. Only trade with money you can afford to lose.

At Reversal Club, you can follow the signals with shares or with CFDs on those shares, for example on MetaTrader 5. Since everything is closed within the day, you don't pay the cost of holding the position overnight.

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