Contract For Difference - What Are They, and How Are They Traded?

Contract For Difference markets (also known as CFDs) are a relatively new derivatives market that is popular in Europe, becoming popular in Asia, and almost unheard of in the US. CFDs are similar to futures markets in that they are based upon some of the same underlying markets (individual stocks, stock indicies, currencies, etc.), and are traded in a similar fashion, but there are some significant differences that make CFDs a market in their own right.

My article describing Contract For Difference markets explains what CFDs are, how they differ from futures markets, and how they are traded. I should mention that while European and Asian traders are going to find the information provided in the article quite useful, US traders are not going to like the information at all. I will let you read the article to find out why.