Cfd trading explained

Investors and traders looking for the perfect explanation about CFD, are bound to get hit by a stroke of intelligence. CFD trading explained through these five questions will help you get a clear and concise knowledge about this trade.

Q1. What is CFD or Contracts for Differences?

A. A CFD is a futures contract between a buyer and a seller where the differences between the currency value and the opening value of the asset.

CFD, a tradable instrument between an investor and a buyer exchanges the differences of the asset in the form of cash at the end of the contract.

Q2. What is the leverage provided on CFD?

A. Another question that arises with what is CFD trading explained, is its leverage. CFD offer considerably higher leverage than traditional trading. Leverages in CFD shares can go up to 20% which translates to higher profits. On the other hand higher leverage also means higher risk and potential losses.

Q3. What are the currency pairs offered in CFD?

A. All major currency pairs are traded with CFD which are:




  • AUD/USD  




Apart from the major pairs, few other currency pairs based on Norwegian krone (NOK), Hungarian forint (HUF), Swedish krona (SEK), Polish zloty (PLN), Romanian leu (RON), Russian ruble (RUB) also trade with CFD.

Q4. What are the trading hours of CFD?

A. What are the Trading hours of CFD also come into light with CFD trading explained? Trading hours differ with products and with brokers. Few popular trading hours of these products are:

  • Currency Pairs

Trading hours of all major currency pairs are between 22:05 to 21:55 only on the weekends.

Norwegian krone (NOK) based currency pairs - 22:15 to 24:00 and 00:00 to 21:57 from Sundays to Thursdays.

Hungarian Forint (HUF) based currency pairs - 21:17 to 24:00 and 00:00 to 21:57 from Sunday to Thursday and 00:00 to 21:55 on Fridays.

Swedish Krona (SEK) based currency pairs - 22:15 to 24:00 and 00:00 to 21:57 from Sunday to Thursday.

Polish Zloty (PLN) based pairs - 22:15 to 20:57 and 00:00 to 21:57 from Sunday to Thursday and 00:00 to 21:55 on Fridays.

Romanian leu (RON) based pairs - 08:20 to 12:55 from Monday to Friday.

Russian ruble (RUB) based pairs - 07:05 to 16:00 from Monday to Friday.

  • Metals

Gold, silver, copper, palladium, and platinum - 23:01 to 24:00 and 00:00 to 21:55 from Sunday to Friday

Aluminum and Zinc - 01:05 to 17:55 from Monday to Friday.

  • Agricultural Products

Agricultural products trade only on weekdays:

Coffee - 09:16 to 18:29

Cocoa - 09:46 to 18:29

Cotton - 02:05 to 19:15

Sugar - 08:31 to 17:59

Soybeans, Rice, Corn, and Wheat - 01:05 to 13:40 and 14:35 to 19:10

Q5. Which countries allow CFD trading?

A. Another question accompanying CFD trading explained – trading countries. Presently the following countries allow CFD trading: Australia, Canada, EU, Japan, New Zealand, Russia, South Africa, Switzerland, the United Kingdom, and some other countries.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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