CFDs provide higher leverage than traditional trading. Standard leverage in the CFD market is as low as a 2% margin requirement and as high as a 20% one. Lower margin requirements mean less capital outlay and greater potential returns for the trader. Also, the CFD market is not bound by minimum amounts of capital or limited numbers of trades for day trading. An investor may open an account for as little as $1,000. In addition, because CFDs mirror corporate actions taking place, a CFD owner receives cash dividends and participates in stock splits, increasing the trader’s return on investment.
Read more: Contract For Differences - CFD Definition | Investopedia http://www.investopedia.com/terms/c/contractfordifferences.asp#ixzz4QhmismzB
Follow us: Investopedia on Facebook