CFD advantage

CFDs are convenient for the stock market (if used under 10 weeks, which is estimated point where CFD financing charge exceeds financing charge for stocks) while futures are preferred by professionals for indexes and interest rates trading. Increased flexibility and leverage are the main advantages of CFDs over more conventional forms of margin trading (like stocks), although with futures there is usually enough leverage available (typically 20:1, but can be as high as 70:1). All forms of margin trading involve financing charges (with the exception of the Spot Foreign Exchange market), although in the case of CFDs and futures contracts these are already embedded in the price of the instrument. CFD-related hedging is estimated to account for more than 25% of the volume on the London Stock Exchange, a fact which corroborates the view that CFDs are recognised as very competitive (and are subsequently widely used) for profitable trading.