Forex CFD

Question 1

What does CFD mean?

Answer 1

Contact for Disclosure

Question 2

What is the purpose of Derivative products?

Answer 2

Derivative products track the market price of an underlying asset so that traders can speculate on whether the price will rise or fall

Question 3

Where is the price of a CFD derived from?

Answer 3

underlying asset prices

Question 4

Describe a CFD?

Answer 4

a bet on a particular asset going up or down in value done with a CFD provider and the trader agrees that whoever wins will pay the other the difference between the assets price when you enter the trade and price when you exit the trade.

Question 5

Describe a Forex CFD:

Answer 5

an agreement/contract to change the difference in the price of a currency pair from when you open your position versus when you close it.

Question 6

Where is a Currency pairs CFD price derived from?

Answer 6

the currency pair price on the spot market.

Question 7

Trading Forex CFD gives a trader the opportunity to:

Answer 7

trade a currency pair in both dividends. Essentially taking both long and short positions.

Question 8

Why did regulators in EU and UK decide that “rolling spot fx contracts” are different from traditional spot fx contracts?

Answer 8

Because rolling spot fx contract have no intention to take physical ownership of a currency; its purpose is to simply speculate on price movement in the underlying currency.

Question 9

What is the objective of trading a rolling spot fx contract?

Answer 9

to gain exposure to price fluctuations related to the underlying currency pair without actually owning it.