How CFD trading works
Understand what a CFD tracks, how bid and ask prices work, why position size matters, and what to check in DOLAR before placing an order.
What is a contract for difference?
A contract for difference (CFD) is an agreement whose value reflects the price movement of an underlying market. You do not own the underlying currency, metal, index, energy product or cryptocurrency.
The result depends on the price difference between opening and closing, the position size and the contract's charges. The exact contract specification and account terms matter.
Bid, ask and spread
The bid is the price at which a market can be sold, while the ask is the price at which it can be bought. The difference between them is the spread. Quotes can change, and the displayed price is not a promise that an order will fill at that exact level.
Review the instrument, direction, order size and quoted prices in the order ticket before confirming a trade.
Leverage, margin and position size
Leverage lets a position represent more market exposure than the margin set aside for it. That can magnify losses as well as gains. Margin requirements, contract sizes and any financing or other charges vary by instrument and account.
DOLAR's trading tools can help estimate position size and risk using the values you enter. Their results are calculations, not a recommendation or a guarantee of a trading outcome.
A practical pre-trade checklist
Before an order, confirm that the market is available to your account, check the current quote and the complete contract details, and decide how much loss you could tolerate. Consider what you would do if the market moves against you or a stop order executes at a different price during a gap.
- Read the instrument and direction shown in the order ticket.
- Check bid, ask, spread, contract size, margin and applicable charges.
- Choose position size based on a risk limit you can afford.
- Review the account terms and risk disclosure before you proceed.
How DOLAR handles live quotes
DOLAR displays bid and ask prices only when a current feed quote is available. When a fresh quote is missing, the platform shows no price instead of presenting an old stored value as current.
Market availability and trading terms can vary by account, jurisdiction and market session. Check the live platform for the current status.
Common CFD questions
Do CFDs give me ownership of the asset? No. They provide contractual price exposure and do not transfer ownership of the underlying asset.
Can I lose more than expected? Leverage, gaps and changing market conditions can increase losses. Review the account's margin and protection terms and the DOLAR risk disclosure.