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CFDs give you exposure
to price movement in the underlying instrument without
buying it.
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More than 20 per
cent of trading volume on the London Stock Exchange
is on CFDs.
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You can trade CFDs
through spread betting firms. Alternatively, you
may use brokers, where costs can be lower but the
minimum deal size is larger.
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Institutional investors
trade CFDs and spread betting firms sometimes use
them to lay off their own bets.
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There is no stamp
duty on your purchase of CFDs, but the saving you
make compared with on shares is wiped out by interest
payments if you hold for longer than about 60 days.
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Foreign exchange
is traded 24 hours a day and London has the largest
market.
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The three largest
forex markets are euro/dollar, dollar/yen and sterling/dollar
(cable).
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You can trade currencies
in physical money, or through derivatives.
