What are CFD Positions?
By SmallStocks on Aug 1, 2008 in CFD
Another feature of a CFD is the feature to allow an investor to take 2 different and opposing positions, depending on the market and the stock itself:
To go “Long“ (Buy)
or
To go “Short“ (Sell)
Taking a “long” CFD position means that an investor has a view that the market is rising, and profits are made as a stock rises.
(ie. You would take out a LONG CFD on Telstra if you believed that their share price would rise)
Taking a “short” CFD position means that the investor has a view that the market is in decline, or will experience a fall in prices. By going “short” an investor is technically selling stock that he/she does not own. In a falling market the investor is then able to buy back the stock at a cheaper price, and hence is able to make a profit. (ie. You would take out a SHORT CFD on Telstra if you believed that their share price would fall).
You must be logged in to post a comment.