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contract for difference (CFD)
Posted: February 6th, 2009, 1:58 pm
by yoshimura1
hello, could someone tell me how to price a CFD (equity)? thanks.
contract for difference (CFD)
Posted: February 6th, 2009, 2:08 pm
by daveangel
there is nothing to price. if you go long through a CFD you get the daily +ve returns or pay the daily -ve returns and you also pay the funding cost. its just like owning the equity
contract for difference (CFD)
Posted: February 6th, 2009, 4:12 pm
by mstrabo
There are often tax advantages associated with CFDs depended on the entities you trade with, hence can be a way of minimizing your tax liabilities.
contract for difference (CFD)
Posted: February 8th, 2009, 10:53 am
by freddiemac
Dont forget that you have counterparty risk with a CFD, eg CMC is a big CFD bank for individuals. If CMC were to default and you would have positive MTM then that would be lost (or rather it would be an unprioritized claim in the bancruptcy proceedings).