What a CFD is
A contract for difference pays the change in price between open and close, multiplied by size. You do not own the share, the barrel, or a slice of the index. There is no certificate to hold.
Learn
Learn the instrument before the ticker.
These notes are educational. They are not a recommendation to buy or sell any market, and they are not a forecast.
Why margin cuts both ways
Margin lets a small balance control a larger notional. A 1% move against a position leveraged twenty times is a large fraction of the margin posted. That is the product, not a defect in the platform.
Spread in cash
Always convert the quoted spread into account currency for your size. A “tight” index spread can still be expensive if the point value is high and the position is large.
The roll
Overnight funding is the rent on leverage. Intraday traders who flatten before the roll do not pay it. Swing traders should subtract it from the idea before they call the idea good.
Gaps
Indices gap on earnings inside the basket, on policy headlines, and over the weekend. A standard stop becomes a market order. A guaranteed stop is the tool built for that specific failure.
Correlation is not a hedge
USTEC and the US 500 often move together, until they do not. A short in one against a long in the other is still two positions, two spreads, and two funding lines.