CFD Trading Explained: How It Works And What Can Go Wrong | DollarsAndSense Markets S2 E2

CFDs allow traders to take advantage of short-term market movements, whether prices are rising or falling. They can also be used to access global markets, trade with leverage or hedge an existing investment portfolio.

However, CFD trading is very different from long-term investing. While leverage can give you greater market exposure with less upfront capital, it can also amplify your losses when a trade moves against you.

In this episode of DollarsAndSense Markets, Alex Furber, Head of Client Engagement at Maybank Securities, explains how CFD trading works, why traders use it and the risks that investors need to understand.

We also discuss going long and short, trading around market news, managing margin calls and why discipline may be more important than correctly predicting every trade.

CFDs can be a useful tool, but they should never be treated as a shortcut to making quick money.

00:00 Introduction
03:25 What Is CFD Trading?
04:18 Common Misconceptions About CFDs
05:36 Why Do Traders Use CFDs?
10:28 Using CFDs For Short-Term Trading
14:46 How Leverage Works In CFD Trading
16:18 Accessing Global Markets And Going Long Or Short
20:05 The Biggest Risks Of CFD Trading
22:23 Practical Risk Management Strategies
27:29 Who Is CFD Trading Suitable For?

This Markets season is proudly brought to you in collaboration with Maybank Securities.

Disclaimer: This advertisement has not been reviewed by the Monetary Authority of Singapore. For general information only and do not constitute an inducement, recommendation, offer, or solicitation to buy or sell any of the securities mentioned. Past performance is not indicative of future results. This interview does not take into account your specific investment objectives, financial situation or particular needs. All investments carry risks, and may not be suitable for all investors. Please seek independent advice to ensure you fully understand these risks and that an investment product is suitable for you before investing. Maybank Securities Pte. Ltd is not liable for any loss or damage, including without limitation loss of profit, which may arise directly or indirectly from this interview.

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