What Is Leverage In CFD Trading?
What Is Leverage In CFD Trading? CFD stands for Contract For Difference and it is a leverage trading product where retail traders can access leveraged markets such as Stocks, Forex, and Cryptocurrency through regulated or offshore brokers. All you need to get started is an initial deposit or margin capital which acts as your collateral money, the rest is handled by your broker. When you open a position with this type of trading platform you only put down a small fraction of your own money when entering the market. For example, traders with smaller accounts can trade lot sizes of up to several hundred thousand with a deposit of only $500. The money lent to you is paid back to the broker once the position is closed out, either for a profit or a loss. The added funds you receive to open the trade can not be lost and you …