Wide range of financial markets
CFD trading allows you to access the largest financial markets in the world. Amber Fund Management offers hundreds of tradable instruments across Forex, Shares, Indices, Metals, Commodities and Cryptocurrencies.
Trade CFDs with Amber Fund Management
What is CFD trading?
Discover how CFD trading works, what drives the markets, and how to trade CFD products.
Introduction
What is CFD trading and how does it work?
A Contract for Difference (CFD) is a derivative product that allows traders to speculate on the price movements of financial instruments such as stocks, indices, commodities, currencies and cryptocurrencies without owning the underlying asset.
Traders agree with a broker to exchange the difference in the underlying asset’s price from when the contract is opened to when it is closed. Unlike shares, CFDs do not provide ownership rights.
CFDs allow speculation in both directions, up or down. Because CFDs are leveraged products, risk management is important when markets move against a forecast.
Trading costs
Hold period
Holding a CFD position open overnight may incur a holding cost. The cost is charged after market close each day and can apply to both long and short positions.
Holding costs can be positive or negative, depending on the trade direction and the underlying asset.
Markets
CFD trading
Trade in falling markets
CFDs provide the ability to go long or short, meaning traders can look for opportunities in both rising and declining markets.
No stamp duty
Because you do not own the underlying asset, there is no stamp duty associated with CFD trading. Leverage can also help traders gain greater exposure using margin.
Leverage
With leverage, you only need to deposit a fraction of the trade’s full value as margin to open a position.
Effective hedging tool
CFD trading can be used to hedge a portfolio against short-term market volatility without selling existing holdings.
Mirror trading the underlying market
CFDs are designed to closely track the price movements of their underlying assets without requiring ownership or shareholder rights.
No fixed expiry
CFDs do not have a fixed expiry date like options and futures, although overnight holding costs should be considered.
Questions
CFD Trading - FAQs
What is the Bid/Ask Spread?
There are three things to consider in CFD trading: Bid, Ask and Spread. Bid is the sell price, Ask is the buy price, and the Spread is the difference between them, reflecting the cost of trading.
Are there any costs in CFD trading?
CFD trading may include spreads, platform or account-related costs, and overnight holding costs for positions kept open after market close.
Can I trade CFDs without leverage?
Yes. Some brokers allow adjustable or no leverage. Trading without leverage usually requires more capital but reduces the risk of magnified losses.
What is the difference between CFDs and Futures?
Futures are exchange-traded agreements with a specific settlement date. CFDs are contracts with a broker that usually have no fixed expiry and are commonly used for short-term price speculation.
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Start trading the global markets with a regulated broker
- 800+ CFD instruments
- Cutting-edge trading platforms
- Spreads as low as 0.0 pips
- Easy and quick access to customer support