What Are CFDs

Contracts for Difference (CFDs) are contracts between a trader and a CFD provider, who will at the close of the contract, exchange the difference between the opening price and the closing price of the underlying index, share, commodity, per the number of specified CFD contracts.

A CFD differs from the traditional trading methods as it is not a purchase of the nominated investment, but trading on its speculated price movement. The main idea of CFDs is the ability to be able to trade higher volumes than traditional trading while using less initial capital.

The buyer of the contracts is required to pay commission to enter the contract, plus fixed interest on the remaining value of the borrowed amount, until they decide to end the contract, at which time they are paid the price difference. The buyer may opt on either side - high (buy) or the low (sell), which means that if the contract was a low trade the buyer could still turn a profit it that was the initial investment.

Advantages of CFDs versus traditional share buying

The key distinction between traditional share buying and CFD buying is that buying a CFD is done on leverage (typically between 5% to 35% for actively traded stocks), both shares and CFDs participate in all corporate actions, both buyers receive dividends but only the buyer of the share is able to vote and receive the franking credits.

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Outsourcing FX: An International Trend That Makes Good Business Sense

Approximately 95% of medium sized and community banks in the U.S. outsource foreign exchange services to financial institutions. A similar trend is occurring on a global basis. Many have concluded that it’s best to outsource FX to companies that specialize in FX processing, products and services. There are two main reasons for this line of thought. First, it’s the FX specialist, not the bank, that’s making the initial and recurring resource investments. Secondly, the FX specialist assumes the responsibility for managing these resources and for much of the business risk.

Reasons for Outsourcing Foreign Exchange Services

Many businesses currently involved in foreign exchange (FX) either on the buy, sell, retail or wholesale side are succumbing to escalating costs and thinning profits. Despite tremendous growth in existing and emerging global FX markets, increased competition and direct costs are becoming disproportionate to profitability. With tapering profits and the cost of management, risk, compliance and technology constantly on the rise, institutions are reconsidering both the feasibility and necessity of offering FX products and services. As an alternative, institutions are now outsourcing FX to companies such as WSD NZ to improve balance sheets, increase profitability, introduce new revenue streams, maintain client confidentiality and share holder confidence.

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WSD has a FREE demo platform that offers continual streaming price quotes, news service, charting and accountancy package. Why not try it out through the link above?

The WSD advantage:

As a regulated, audited and professional Forex provider WSD is the ideal partner to trade the markets with.

We have tight spreads with prices that remain firm regardless of market conditions.
During normal trading hours the price quoted is good for up to 50 Lots and as we have no dealer intervention - you can be assured that this is the market price.

There is no start up fee or commission to be charged whatsoever. That means you receive all the benefits a professional trader should be offered without the charges that normally accompany price / news / chart / accountancy packages from other brokers.

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Already established in the US, Thailand and Dubai with a culturally diverse workforce WSD can communicate in any client’s language, which is just one example of the importance the company places on investing in its own infrastructure. But it’s not stopping there.

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