CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Forex CFDs
Your CFD and forex broker FXFlat offers you leveraged trading of forex CFDs in forex trading in addition to spot trading in the form of forex spot - and that at very favorable conditions and fast executions in the offered trading platforms such as MetaTrader 4 and 5.
Forex CFDs are derivatives issued by an issuer and have a fixed reference to a specific reference market. The price of a CFD (abbreviation for Contracts for Difference) of provider A is also determined only by him and may differ from provider B or even the reference market. Forex CFD trading is a bilateral OTC trade while spot foreign exchange trading (Forex spot) is a multilateral OTC trade. This means that you have to buy a CFD only from the respective issuer and also compulsorily sell it.
Forex CFDs are continuously tradable 24 hours from Sunday 23:00 to Friday 23:00 and are charged with financing costs, which do not exist in Forex Spot trading at FXFlat. When trading CFDs, no physical products are bought and sold, but only speculated on the price trend of the underlying assets.
Generally, the Following Applies in Forex CFD Trading:
CFDs are used to speculate on the price performance of an underlying asset.
CFD forex trading is about the difference between opening and closing position.
Leverage is used.
CFDs can be traded on both rising and falling markets.
Let's assume that you believe that the EUR/USD exchange rate will rise in the next few days and you buy a CFD at a rate of 1.0700. In this example, the CFD is equal to 10,000 units in the base currency. Further, let's assume that the margin is one percent and thus you need to deposit a security deposit of 100 euros (0.01 x 10,000) when opening the position.
As expected, the euro appreciates against the dollar and you close the position at 1.0750. There is a difference of 0.0050 (1.0750-1.0700) between the opening rate and the rate when you close the position. The profit (and loss) is calculated on the basis of the price currency. In our case, you have made a profit of 50 dollars (0.0050 x 10,000). After realizing the profit, the position will be converted into Euro, which corresponds to an amount of approximately 46.51 Euro. The value date (valuta) is immediate.
Tradable Forex CFDs Pairs at FXFlat
Below you'll find a short overview of the currency pairs that FXFlat offers as Forex CFDs. More details can be found in the contract specifications here.
