Kelvin Posted May 24, 2020 Share Posted May 24, 2020 Hello, explain to me, please. Quote Link to comment Share on other sites More sharing options...
0 Brandon Posted May 24, 2020 Share Posted May 24, 2020 Hi Kelvin, Both CFD and warrants get their value from an underlying asset without necessarily owning it. However, in CFD, you may have the option of buying the asset, unlike in CFD, where you can not possess it. Same as ordinary shares warrant trade in the London stock exchange. This is also similar to the listed CFD. In the London stock exchange, you have the opportunity to follow up on the market prices. While trading in either CFD or covered warrants, you aim to profit from the underlying asset. The contract for difference is an agreement to reimburse or get the difference in the opening and the closing price of an underlying asset. In covered warrants, if you speculate that the value of an essential asset will rise, you purchase a call warrant. On the contrary, if you suppose that its price will fall, you buy a put warrant. The prices of a warranty vary since the market makers issue them. A warrant guarantees you the right to trade the underlying asset at a given value before it expires. However, this usually is not an obligation to buy or sell the asset. In covered warrants, if a trade goes against you, you will pay a premium. In CFD, however, if the market moves against you, you will lose your money. If a trade favors you, you will make a profit instantly, and therefore you need not pay for premium. In CFD, the chances of losing more than what you invested are high anytime the market fails to favor you. In covered warrants, however, the premiums you pay limit the losses that you may incur. You can also make a considerable amount of profits for small price changes in covered warrants. Quote Link to comment Share on other sites More sharing options...
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Kelvin
Hello, explain to me, please.
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