<%@LANGUAGE="JAVASCRIPT" CODEPAGE="1252"%> Signal Futures

 


 
   
   
 
   
   
 
   
   
 
      
CONTRACTS FOR DIFFERENCES -  DEFINITION



A contract for difference (CFD) is a contract where the two parties agree to exchange the difference between the opening and closing price of the contract.

The CFD price is based on the underlying JSE listed security.
Clients that purchase CFDs do not purchase the actual underlying shares so they have all the benefits and risks of owning shares without actually owning it.

CFDs are leveraged products. A deposit of cash margin, a percentage of the value of the transaction, is required in order to execute a trade instead of the full value of the transaction.
In reality an investor going long is in theory borrowing money to complete the full value of the transaction. The investor who is short selling is in theory lending money to the counter party.

CFD Risk Warning:
CFDs are leveraged instruments and carry a high degree of risk. It is possible to lose more than your initial margin deposit while trading CFDs. Please ensure that you are aware of all the risks pertaining to CFDs. Investors positions may be closed out if there are insufficient funds to meet a margin call or if underlying securities are not available to hedge against investors short positions.

The Difference between CFDs, Single Stock Futures and Underlying Equities

  CFD SSF Equity
Leveraged Instrument Yes Yes No
Short Selling Available Yes Yes No
Direct Market Access Available Yes No Yes
Need to rollover position No Yes No
Voting Rights for The Company No No Yes
Actual ownership of the Shares No No Yes
Earn dividends Equivalent Cash Payment Equivalent Cash Payment Actual