Contracts for difference (CFD)

Contracts for difference (CFDs) provide a flexible way to trade on the price movements of thousands of global financial products such as Shares, indices, commodities, Forex /foreign currencies etc.

When you trade using CFDs, you don’t buy or sell the underlying asset (e.g. a physical share), you buy or sell a number of units, depending on whether you think a product’s price will go up or down. For every point the price moves in your favour, you gain multiples of the number of units you have bought or sold. For every point the price moves against you, you will make a loss. Please remember this loss can exceed your deposits.

Some of the benefits of CFD trading are that you can trade on margin, you can go short (sell) if you think the price will go down, and you can use CFDs to hedge an existing physical portfolio.

Funding of your CFD account.

Various CFD company may require you to place the
initial deposit of at least SGD500 to SGD2000 in order to start using the CFD trading account.

Funding can be done using the following methods:

• Credit Card
• NETS
• Cheque
• ATM
• Internet banking
• Wire transfer

There are also Financing charges involve when dealing with CFD trade.

There is an overnight charge to hold my CFD position open. The financing charges various from different CFD company.

Individual who wishes to open the CFD trading account will have to check with the CFD company directly for all details regarding account opening, deposit and finance charges etc.

List of CFD Trading Companies are as follows:

1. Phillip CFD Trading - https://www.phillipcfd.com

2. CMC Markets - http://www.cmcmarkets.com.sg/

3. CityIndex - http://www.cityindex.com.sg/

4. IG CFD Trading - http://www.ig.com/