What is a CFD?

A CFD stands for “Contract for Difference”), and it is based on speculation and differences. You essentially buy a very small piece of a company or market, and you speculate on if the company or market will do well (go “long”) or if its stocks will fall (go “short”). It is a very simple kind of investing, and it doesn’t require a lot of commitment to a stock, which is why it is ideal for beginners looking to invest in something small. There are virtually no risks to investing in a CFD (unless you invest a lot of money, then it might become a disaster pretty quick). You could start today, but you’re going to have to find a good online broker first.

Finding a CFD broker

A CFD broker is pretty much a regular online broker that also offers trading in CFD’s. You can find these brokers online, just like any other broker. Which CFD broker fits your needs best is all up to you; it really is a personal preference. We recommend doing your research first. Yes, that means reading a ton of online reviews and more. You want to really make sure you can trust the broker that you are looking into. After all, a broker is supposed to be reliable in case of something bad happening; you need a good broker to fall back on at all times. Trading in CFD’s makes that no different, just keep that in mind.