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What are the Benefits of Trading CFDs in Dubai?

If an investor is living in Dubai and wants to earn profits via trading, the world is their oyster. Dubai offers plenty of avenues for investors to curate portfolios with assets that add value to their life. However, CFDs allow investors to do so without owning an asset at all. Continue reading to learn more about CFDs and how investing in the instrument can be beneficial for Dubai-based traders.
 
What are CFDs?

CFDs, or Contracts for Difference, are a type of financial derivative that allow investors to speculate on the price of an asset without owning it. An investor can trade in CFDs by agreeing to exchange the difference in an asset’s price with a broker. The difference is calculated on the price when a trade opens and when it closes. If the price moves in the investor’s favour, they make a profit. If the opposite occurs, the investor incurs a loss. An investor can trade long, or buy, if they expect the price to rise and short, or sell, if they think the price will fall.

For instance, an investor opens a CFD on gold at AED 2000 per ounce. If they purchase and the gold’s price rises to AED 2500, they earn a difference of AED 500 per ounce multiplied by the position size. If the price of gold falls to AED 1500, they lose the difference. It is important to remember that investing in CFDs does not create ownership in any asset.

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Location: The Exchange Tower - 2306 - Al Mustaqbal St - Business Bay - Dubai - United Arab Emirates

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