Introduction to CFD Trading

In recent years, Contract for Difference (CFD) trading has gained popularity with retail traders. This is due largely to the advent of the Internet which has made it possible for companies to offer traders access via web-based trading platforms. We may take it for granted now, but this enhanced connectivity has also paved the way for traders to have access to live prices and trade multiple asset classes.

CFDs offer the trader opportunities to take positions in certain assets, including commodities and market indexes without actually owning them. This makes CFDs an excellent choice for either diversifying investment portfolios or hedging current holdings to better manage overall market exposure. CFD trading also permits the use of leverage which enables traders to take positions which are larger than the value of their accounts.

The Commodity Futures Trading Commission (CFTC) limits leverage available to retail forex traders in the United States to 50:1 on major currency pairs and 20:1 for all others. OANDA Asia Pacific offers maximum leverage of 50:1 on FX products and limits to leverage offered on CFDs apply. Maximum leverage for OANDA Canada clients is determined by IIROC and is subject to change. For more information refer to our regulatory and financial compliance section.

Contracts for Difference (CFDs) or Precious Metals are NOT available to residents of the United States.

This is for general information purposes only - Examples shown are for illustrative purposes and may not reflect current prices from OANDA. It is not investment advice or an inducement to trade. Past history is not an indication of future performance.

Trading FX and/or CFDs on margin is high risk and not suitable for everyone. Losses can exceed investment.