This the basic difference between the Equity Market and Contract for Difference (CFD) Market.

In equity market, you need the total amount of the Security or Commodity that you want to purchase. There’s no leverage. To buy $10,000 worth of Apple, you need $10,000 initial capital but the reverse is the case with the CFD market. In CFD, you can by $10,000 worth of Apple stock with $1000 if you have a 10X leverage.

Also in the equity market, you can only buy low and sell high. You can’t short the market. In contrast, you can enter short and long position in the CFD market. You can trade both ways.

Finally, you pay stamp duties in the equity market, and your broker doesn’t finance you. Conversely, you don’t pay stamp duties in the CFD market, and your broker do finance you when you use leverage.

Hope you learnt something new about #trading #investing #market #stocks #equity #CFD #broker

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