hello,
As I Observe CFD become more and more popular each day. You can actually trade anything with them much easier. Also I observed that spreads for FX trades are even smaller for CFD than for the underlying asset(future contrat, bond etc). Also for specuation in stocks you can get very high leverage.
My questions:
1) what are the problems with CFD? There is no clearing house, nor much regulation as far as I know. I heared hat some countries such as Poland offer a state guarantee up to 20000euro for account at polish brokers but I'm not shure.
2) When I buy a CFD, does the broker actually buy the underlying asset, or is it only a mith? Do I Actually influence the assetmarket with my CFD? (ex: buy a CFD for a stock. Does that influence the stock price?)
3)Is there any chance the counterparty may default, and I would get a total loss?
Any other problem you have run into with them, and why would you prefer trading the underlying asset rather than a CFD?
As I Observe CFD become more and more popular each day. You can actually trade anything with them much easier. Also I observed that spreads for FX trades are even smaller for CFD than for the underlying asset(future contrat, bond etc). Also for specuation in stocks you can get very high leverage.
My questions:
1) what are the problems with CFD? There is no clearing house, nor much regulation as far as I know. I heared hat some countries such as Poland offer a state guarantee up to 20000euro for account at polish brokers but I'm not shure.
2) When I buy a CFD, does the broker actually buy the underlying asset, or is it only a mith? Do I Actually influence the assetmarket with my CFD? (ex: buy a CFD for a stock. Does that influence the stock price?)
3)Is there any chance the counterparty may default, and I would get a total loss?
Any other problem you have run into with them, and why would you prefer trading the underlying asset rather than a CFD?
