What is a CFD - Introduction

A CFD or Contract for Difference is an agreement between two parties to exchange, at the close of the contract, the difference between the opening price and the closing price, multiplied by the number of reference shares specified within the contract. The 'reference shares' are the underlying shares specified in the CFD.

The economic performance of a CFD is determined by the performance of the underlying reference shares.

Although CFDs replicate the price movement of the underlying reference shares, they convey no right or requirement to acquire or deliver the physical shares.

The contract value of a CFD is defined as the number of reference shares specified in the contract, multiplied by the price of the underlying reference share.

If you take a long position, you will make a profit if the contract value increases. Conversely, if you take a short position, you will benefit if the contract value falls. You can, therefore, profit from both rising and falling share prices.

It is important to note that CFDs are a margined product and as such are not suitable for all investors. Due to the leveraged nature of the product you may loose far in excess of your initial investment.

GNI touch which is a trading name of MF Global UK Limited and is authorised and regulated by the Financial Services Authority. CFDs are only available to institutional or experienced investors. If in doubt you should seek independent advice. Securities and derivatives markets are subject to rapid and unexpected price movements and you may get back less than you invested or be required to make unlimited additional contingent payments if the market moves against you. CFDs are not available to US residents. Telephone calls and e-mails to and from MF Global UK Limited / GNI touch maybe recorded and / or monitored for regulatory and training purposes. Basis and levels of stamp duty / SDRT may change. Registered Office : Sugar Quay , Lower Thames Street, London, EC3R 6DU Registered in England No. 1600658