is retail forex basically a CFD?

A contract for difference (CFD) is a synthetic financial product based on another security, commodity or index. It's a contract that the broker creates, that both parties agree to so that you can trade movements in real financial instruments and profit and loss from the difference. Unless a broker explicitly states it's a CFD product, any FX trade you make is usually a real FX transaction executed in the FX market.
 
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lovethetrade said:
A contract for difference (CFD) is a synthetic financial product based on another security, commodity or index. It's a contract that the broker creates, that both parties agree to so that you can trade movements in real financial instruments and profit and loss from the difference. Unless a broker explicitly states it's a CFD product, any FX trade you make is usually a real FX transaction executed in the FX market.
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Braaa haha. Do you think retail traders have trade executed in "the FX market?" AT BEST, usually if you are A-Book, the broker hedges their counterparty trade against you on the real fx market. How is this different than CFD, really?
 
lentus said:
Braaa haha. Do you think retail traders have trade executed in "the FX market?" AT BEST, usually if you are A-Book, the broker hedges their counterparty trade against you on the real fx market. How is this different than CFD, really?
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If you make money, who's complaining?
 
What I know is that when you trade Forex, you buy and own the actual instrument. With CFDs you don't own anything, it's pure speculation. Based on that trading retail is not a CFD.
 
Yes, its like a CFD in some respects. You own the rights attached to the contractual agreement with the broker, but there is no possession of anything at any point since there is no underlying instrument.
 
I agree that it has similarities with CFDs but, in the end, they're not the same thing. With retail foreign exchange trading, individuals speculate on the exchange rate between different currencies. Today, traders are able to trade spot currencies with market makers on margin. This means they need to put down only a small percentage of the trade size and can buy and sell currencies in seconds. I'm not a retail forex trader, I trade CFDs with https://www.investous.com/international/. With CFDs, I have a wide range of financial instruments, while retail trading is a small segment.
 
Muller21pr said:
I agree that it has similarities with CFDs but, in the end, they're not the same thing. With retail foreign exchange trading, individuals speculate on the exchange rate between different currencies. Today, traders are able to trade spot currencies with market makers on margin. This means they need to put down only a small percentage of the trade size and can buy and sell currencies in seconds. I'm not a retail forex trader, I trade CFDs with https://www.investous.com/international/. With CFDs, I have a wide range of financial instruments, while retail trading is a small segment.
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Thank you! Well said!
 
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