Question about CFDs

Discussion in 'Ask any question!' started by L. Dufour, Jan 4, 2017.

  1. L. Dufour

    L. Dufour New Member

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    Hello everyone out there,

    I actually registered to this forum just to ask this question :
    Having traded a bit of CFDs for a while now, especially on stocks, I noticed something odd : Why does the order ticket behave like a real broker's one as if you were trading actual stocks while when trading CFDs it is of common knowledge that you don't actually own the underlying asset, but are just trading a contract between you and your broker instead ?
    Let me explain myself: Often the order ticket behaves like if there wasn't any share available to purchase as if you were trading on the actual market, and moreover, the spread actually gets higher and lower, while sometimes the "sell" or "order" button or both of them altogether are greyed out, just like on the actual market when there is no one willing to sell (or to buy) this particular security at the moment.

    This is kind of odd, basically since you're trading contracts with your broker and not the actual asset, then it should be virtually illimited in quantity (provided that the broker's liquidity at the moment is sufficient of course), right ? I was thinking CFDs' rates were only based on the underlying assets' quoted rate, but it seems that somehow they behave just like their underlying products for some reason. I could use a help to understand what's really going on here.

    Thank you very much, don't know if I explained myself clearly enough here, feel free to ask me if I put it all upside down since English is not my native as you would have guessed :)

    Have a nice evening
     
    Tiptopptrader likes this.
  2. Tiptopptrader

    Tiptopptrader Well-Known Member

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    I don't have answer for you @L.Dufour as I have never traded CFD's but I wanted to welcome you to the board. The CFD's do look interesting though...TTT
     
  3. L. Dufour

    L. Dufour New Member

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    Thanks a lot @Tiptopptrader :)
     

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