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Research · Learn CFDs

Learn CFDs

CFD education by market group.

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CFD Essentials · 20 articles
What Is a CFD and How Does CFD Trading Work? — OTCN Research cover
CFD Essentials 13 Oct · 10 min

What Is a CFD and How Does CFD Trading Work?

A CFD is a contract to exchange the difference in an asset's price between opening and closing a trade. How CFDs work, what they cost and why most lose.

How Stop-Loss Orders Work and Why They Can Slip — OTCN Research cover
CFD Essentials 13 Oct · 6 min

How Stop-Loss Orders Work and Why They Can Slip

A stop-loss closes a trade at your level but fills at the next available price, which can be far worse in a gap. How stops work, slippage and guaranteed stops.

How Short Selling Works With CFDs — OTCN Research cover
CFD Essentials 13 Oct · 6 min

How Short Selling Works With CFDs

With a CFD you can sell first and profit if the price falls, without borrowing shares. How short positions work, what they cost and why losses are open-ended.

What Is Negative Balance Protection? — OTCN Research cover
CFD Essentials 13 Oct · 6 min

What Is Negative Balance Protection?

Negative balance protection limits a retail trader's losses to the money in the account. Where it applies, how it works and what the 2015 franc shock showed.

What Is Leverage in CFD Trading? — OTCN Research cover
CFD Essentials 13 Oct · 9 min

What Is Leverage in CFD Trading?

Leverage lets you control a larger CFD position with a smaller deposit, magnifying gains and losses. How leverage ratios work, an example and the limits.

How CFD Prices Track the Underlying Market — OTCN Research cover
CFD Essentials 13 Oct · 6 min

How CFD Prices Track the Underlying Market

CFD prices come from the underlying market plus a spread. How cash and futures-based CFDs are priced, and why prices can differ from the exchange.

Equity, Free Margin and Margin Level Explained — OTCN Research cover
CFD Essentials 13 Oct · 6 min

Equity, Free Margin and Margin Level Explained

Equity is balance plus open profit or loss; free margin is what is left after used margin; margin level is equity ÷ used margin. Formulas and an example.