CFDs, or contracts for difference, have experienced a surge in popularity with private investors and traders.
They are extremely flexible trading instruments that offer high degrees of leverage, the opportunity to go long and short and to hedge open positions in other tradable instruments. Similar to spread betting, traders can take advantage of price movements without having to buy the underlying asset, thereby avoiding stamp duty, broker commissions and 100% capital requirement issues.
However, CFDs are high risk, predominantly because of their gearing exposure, and anyone entering this market should fully understand the risk and rewards before they start trading.
'CFDs Made Simple' is a short, straightforward, no-nonsense, practical guide to this exciting product written in Peter Temple's accessible style.
2. Basic Concepts
- Underlying
- Contracts
- Cash settlement
- Gearing
- Hedging
- Indexes
- Margin
- Short Selling
- Comparison With Other Derivatives
3. How CFDs Work
- CFD Basics
- CFD Mathematics
- 7 CFD Rules of the Road
- A Final Word on Gearing and Risk
4. Dealing
- Opening an Account
- Day-to-Day Trading
5. Trading Strategies
1. Long-Only or Short-Only Trades
2. Long-Only or Short-Only Trades Using Stop-Losses
3. Cash Extraction Trades
4. Pairs Trading
5. Relative Value Trades
6. Hedging
7. Using CFDs for Adjusting Asset Allocation
8. Other Strategies - Exploiting Ex-dividend Anomalies
Afterword
6. Trading Disciplines
- Trading Rules
- Money Management
- Trading Tips for CFDs
- Developing Your Plan by Looking at Your Assets
7. Timing Your Trades
8. Resources for CFD Investors
Web Resources Speciļ¬c to CFDs
Websites
Index
About Peter Temple
Peter Temple has been involved in the City and its financial markets for nearly 35 years as a Fund Manager, an Investment Analyst and, for the last 17 years, as a freelance financial journalist. He is a regular contributor to a number of publications including the Financial Times, Investors Chronicle, and Interactive Investor, and has written more than a dozen investment books. He is a Fellow of the Securities Institute.
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