I've searched and searched for a recommendation on here for CFD books but can't find any.
What I'm looking for is a beginners guide. I've read several share trading, technical analysis and option books so am looking for a book based solely on CFD's.
Any recommendations?
Try to get hold of Catherine Davey's "Contracts for Difference"I've searched and searched for a recommendation on here for CFD books but can't find any.
What I'm looking for is a beginners guide. I've read several share trading, technical analysis and option books so am looking for a book based solely on CFD's.
Any recommendations?
CFDs are theoretically zero sum game, and in practice a negative-sum game.
Has anyone got any other recommendations other than those above? I've come across books like "CFD's for dummies" etc anyone read it?
So is the stock market, futures, etc, not just CFD's.
Investing in the stock market is not necessarily zero sum. In fact, by a graham definition, investing is by its very definition not a zero sum game.
Futures carry much of the same risks as CFDs and I wouldn't encourage their speculative use any more than CFDs, the same goes with stock options. The advantage of those two over CFDs is however that it's possible to limit your losses, even in the absence of liquidity. Of course the potentially astronomical gains from CFDs are higher, hence the appeal.
Those bits in red are just wrong.
Those bits in red are just wrong.
I don't think so.
Fair enough. But lacks an understanding of how to use them. just because they give you a minium margin doesn't mean your are leveraged.Futures carry much of the same risks as CFDs and I wouldn't encourage their speculative use any more than CFDs,
the same goes with stock options.
Thats not true. If you are as above a purchaser your risk with options are limited to funds to open. CFDs and Futures if short theoretical have unlimited potential for loss. If Long have a Maximum risk of the contract value, which is far more than the initial margin required to open a trade.The advantage of those two over CFDs is however that it's possible to limit your losses, even in the absence of liquidity.
The possible gains from all derivative is large. Usually the pay-off for futures and CFDs are the same (ignoring interest and cost of carry) and linear. Options also have large potential reward but as they have a different beta the reward is different.Of course the potentially astronomical gains from CFDs are higher, hence the appeal.
If you are as above a purchaser your risk with options are limited to funds to open. CFDs and Futures if short theoretical have unlimited potential for loss. If Long have a Maximum risk of the contract value, which is far more than the initial margin required to open a trade.
The possible gains from all derivative is large. Usually the pay-off for futures and CFDs are the same (ignoring interest and cost of carry) and linear. Options also have large potential reward but as they have a different beta the reward is different.
The only thing that makes stocks NOT zero sum, as far as I can see, is dividends. And as I 'trade', not 'invest', I couldn't care less about dividends. Almost all the stocks I trade don't pay dividends anyway.
We're on the same page. Not really sure why you're disagreeing with me.
Because if you re-read the post I responded to you will see it is wrong. CFDs or futures do not have the theoretical advantage of limited losses where options do.
And CFDs have not got an advantage over possible gains compared to futures.
Futures contracts can be bought and sold long, without exposure of more than principal, just like options.
I'm not saying that all CFD trades are riskier than all options trades, or that CFDs are inherently more risky than some other instrument. Both can be very safe and very risky, depending on their implementation. What can be said however is that the downside risk of CFDs has to be coupled with a greater potential reward, otherwise people wouldn't use them (why would you purchase a CFD, if options and futures can be safer and offer the same return?).
You throw around the word "wrong" a little too much I think.
What can be said however is that the downside risk of CFDs has to be coupled with a greater potential reward, otherwise people wouldn't use them (why would you purchase a CFD, if options and futures can be safer and offer the same return?).
You throw around the word "wrong" a little too much I think.
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