CFD’s Level 1
•What are CFD’s?•Why do they exist?•How do they work?•Trading CFD’s using Saxo Trader II
Agenda
What are CFD’s?(Contract For Differences)
• Enables investors to participate in the price movements of stocks without ownership of the underlying share
• Based on either individual stocks or indices• Invented in the UK• CFDs enable leverage of stock-related investments
Nominal Value
Margin required
Nominal Value
Why do they exist?• Potential tax
breaks
• Leverage
• Diversification
How do they work?• A CFD is a derivative of either a stock or an index• A CFD reflects the value of the underlying asset/share +/- 0.1% - (this is the risk
premium)• You trade the amount of shares you want, but only use a fraction of the capital
Price difference is +/- 0.1%
Green prices. What you see is what you get.
Trading CFD’s using Saxo Trader II
• Trading made simple with our easy-to-use interface
• Clearly defined pricing, margins and costs
Account Summary
Trading CFD’s with Saxo Bank
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