As we explained before, contracts for difference (CFDs) are a way to gain exposure to the price movement of an asset without buying the asset outright. For that reason, trading CFDs requires a lot less start-up capital than long-term investment portfolios.
Because CFDs work differently from ordinary shares, it’s important to understand what your exposure is and how margins work. In this video, Simon explains the relationship between exposure and margin.
For a practical guide on implementing these principles in your own trading account, watch this Boot Camp video on margin, leverage and exposure.
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