CFD vs ETF
| # | CFD | ETF |
| 1 | CFD (Contract for Difference) is a financial derivative product that allows traders to speculate on the price movement of an underlying asset. | ETF is a type of investment fund and exchange-traded product that tracks an underlying basket of assets. |
| 2 | CFDs are traded on margin i.e. traders only need to deposit a fraction of the full value of the trade. | ETFs are traded like stocks on an exchange. |
| 3 | The aim is to profit from price changes of the underlying asset. | The aim is to get exposure to a diversified portfolio of assets. |
| 4 | No ownership of the underlying asset. | Ownership of underlying assets. |
| 5 | Higher risk due to leverage and the short-term nature of trades. | Lower risk due to diversification and the longer-term nature of the investment. |
| 6 | Suitable for short-term traders and high-risk tolerance investors. | Suitable for long-term and low-risk tolerance investors. |
CFD
A CFD (Contract for Difference) is a financial derivative product that allows traders to speculate and benefit from the price movement of an asset without actually owning the asset.
The profit or loss from a CFD trade is determined by the difference between the price at which the trader enters the trade and the price at which they close it.
CFDs are generally used for short-term trading purposes and are considered to be high-risk investments.
CFDs are pretty much an advanced trading strategy.
ETF
An ETF (Exchange Traded Fund) is a type of investment fund with shares that are tradeable on a stock exchange.
ETFs are like mutual funds, but trade like a stock on an exchange. They are exchange-traded investment vehicles that typically mirror a particular index.
ETFs offer investors a convenient way to gain exposure to a diversified portfolio of assets in a single investment.
Learn more about ETFs in detail.
Advantages and Disadvantages of CFD
Advantages of CFD
- Leverage: CFDs are traded on margin, which means that traders only need to deposit a fraction of the full value of the trade.
- Flexibility: CFDs allow traders to take both long (buy) and short (sell) positions on the price of an underlying asset.
- Wide range of markets: CFDs are available on a wide range of markets, including stocks, indices, commodities, currencies, and cryptocurrencies.
- Low cost: CFDs typically have low transaction costs compared to instruments like futures or options.
- 24/7 trading: CFDs are traded over-the-counter, which means that they can be traded around the clock.
- Ease of access: CFDs can be traded through online brokers.
- Diversification: Many CFD providers offer CFDs on international shares in addition to items you easily cannot trade, such as gold, silver, oil, indices, etc.
- Portfolio protection: With CFDs, investors can sell certain short stocks, sector indices, or leading indexes without selling any of their portfolio shares.
Disadvantages of CFD
- High risk: CFDs are leveraged products, which means that traders can potentially lose more than their initial investment. Even though you don’t have to deposit the total value, you risk losing your initial margin.
- Complexity: CFDs can be complex to understand, especially for inexperienced traders.
- OTC market: CFDs are traded over-the-counter (OTC), meaning that they are not traded on regulated exchanges. This can increase the risk of market manipulation.
- Fees: Spread costs, overnight financing charges, and broker fees can significantly impact profitability.
- Limited regulation: CFDs are not regulated in the same way as other financial instruments, such as stocks which can limit the protection available to traders in the event of broker insolvency or market manipulation.
- Short-term focus: CFDs are designed for short-term trading. Traders need to be constantly monitoring the markets which can be time-consuming and stressful.
- No ownership: Since the CFD investor does not own the underlying asset, the investor has no shareholder or voting rights.
- Payment of spread: The major drawback of CFDs is the instant reduction of the investor’s original position, which is caused by the amount of the spread when entering the CFD. The same happens when exiting.
CFD vs Stocks
The main difference between CFD and stocks is ownership and leverage. You become the owner of the shares when you purchase a stock and you must pay the full share price.
In CFD, without holding the underlying asset, you can speculate on the price by engaging in online CFD trading. You can enter a trade with a lower initial investment because they trade on leverage.
CFD vs Futures
The main difference between CFDs and futures is liquidity and financing. CFD orders are typically more easily completed and have lower entry requirements than futures contracts. Futures are usually traded on exchanges, whereas CFDs are traded directly with brokers.
Can an ETF be a CFD?
ETF and CFD are different financial instruments.
Is CFD better than investing?
Neither is better than the other. It just depends on your short-term or long-term financial goals.
CFD trading allows you to speculate on share prices without holding any shares while investing allows you to assume direct ownership of shares. If the value of the shares you purchase increases over their original cost, investing can be profitable.
? Understand that CFDs are high-risk investments and may not be suitable for all investors. It is always advisable to seek professional advice to fully understand the risks involved before trading in CFDs.
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Am happy to read this ope, my Question is this..how much can I withdra from your App to my bank account.
Thanks
Where is your office in Nigeria?
Do you have an office in Port Harcourt?
Do you have a desk with any bank in Nigeria
This is so true and real, Ponzi has led a generation of greedy people who are under the exposure of the cruel government to continue in the greed run, it looks so real, and has so much seduction and compulsion.
My question is how do I invite people to invest pls
Yeah, knowledge leads, getting quick rich is scam…….if I want to start to invest now, do I need to invest on three sides…..do the funds invest on the same things?
Good day,
Where is the question you promised at the end?
Hi Tosinmile, it’s the last sub-title:
Nothing is free – Will knowledge or greed lead?
Do you want to be a successful investor?
Fascinating read as usual. I’m truly grateful that I had an earlier exposure to Ponzi schemes and suffered minimal loss before learning from it. Ponzi schemes will always exist because ppl are inherently greedy and desperate to make money. I just hope I can educate my children to be money wise
How do we trust you too, because we don’t know your house, family, and you don’t have an office too. All we do with you is still on app (cowrywise). So what do we do sir, ma?
Hi Nuhu.?
We’re regulated by the SEC – https://cowrywise.com/blog/cowrywise-sec-license/
Our office is located at 5C, Rev. Ogunbiyi Street, Ikeja GRA.
It is false to state that we do not have an office.
Ope i have read this and I totally agree. Don’t worry I wont put money in Ponzi, when I can keep it with you. Ope please no more emails for this week. Thank you my love.
Lmao
Thank you for this
An intelligent and informative piece, however, where is the question?
When can I be able to withdraw from this site please
So my question is what’s the minimum amount u can invest ?
#200
I appreciate your effort, reaching out to people like me, Thank you. It really a privilege I most say. More updates please.
Ope, why are you guys not into stocks? Your only mode of investment is mutual funds and treasury bills.
What is the minimum amount to start with,can I withdraw Money at any time and what is the parentage of the profit.
Hello Maryam, trust you are doing well. The minimum amount you can invest is N100 to N1,000,000 depending on you. You can withdraw your money depending on the type of savings or investment plan you choose. When you are about to save all this option of how long your savings will be comes up and you decidecwhis is best for you. I hope this was helpful. Annual returns is 8.8%
Thanks ?
The write up was very helpful for me and the following questions, and response that followed. Thank you Ope for constantly updating us.
How can I withdraw from my emergency plan without maturity stage?
I can’t just stop following any article from you Ope, because you and Cowrywise has opened my eyes positively, great one, kudos.
I’m still not getting this,I as a person I’m not investing all I want to do is to save and anytime I tried doing that it doesn’t work out it kept saying your bag is secured while I won’t still be debited didn’t you think there is
anything going on with my account
This is educational and inspiring. You’ll be surprised some people will read this piece and still fall for sh*t when it occurs. Nigerians no deh hear the word. All of the people I warned during the time of Ponzi still invested when Loom surfaced. In the end, they were all doomed. A word is indeed enough for the wise.
That is an interesting and educating story from you there…. All those things at the starting point they look real but at the end you will see it’s fake coming to your side are we in the surfer hand or is it going to do otherwise
Thank u every much
Glad to read dis
Hi new something important
Yeah, knowledge leads, getting quick rich is scam…….if I want to start to invest now, do I need to invest on three sides…..do the funds invest on the same things?
Hhmm ope this is really great I love it I most commend you you are doing a great job I have fall a victim of some apps even the WhatsApp group also thank God cowrywise have open my eyes now because I’m investing with them and my profit is coming in everyday thanks Ope more update please
Wow I really love your write up, I give u five star ?????
Interesting and eyes open especially to greedy people who are too addicted to get rich quickly.
Pls Ope, I have a very serious matter and I’m very sad about it, with my account that your company is toying with by flagging me repeatedly.
What’s the problem I don’t know, I message, you did not reply.
Upon many people, I’m introducing to your platform and a lot of canvasses I do because many are saying to me that Cowrywise is a scam and I’m trying to condemn it
But, what I’m seeing from your company to me is scaring me seriously. The most painful aspect is that just immediately I link my card to start saving the next sad experience after my activation till now is that I’m on able to log into my account again after my card details have been collected and my account is debited..ah! Now you log me out of the app and I can’t log in any longer till now so so sad and this is very alarming.
Even one of my close related that I refer, she also submit all her card details and start saving, the same thing, she was logged out and she was even saying sebi I said Cowrywise is legit. In fact, I’m short of words, I just try to excuse myself because I’m disappointed with that development after she connects her card, that’s too bad.
In fact, I force her to do it, she didn’t want to use her card but I told her no problem.
But now, you create a problem
Pls help me rectify this oo
It’s very sad and I can’t log in to my account again…o sad gan
How can someone start investing with?
Into what can we invest?
ayindeyahaya2233@gmail.com
Wow am really appreciate with this enlighten.
Thanks Ope and Cowrywise.
I learnt my lessons about Ponzi schemes as far back as 2016 after MMM served me my first breakfast with my school fees. But what about these platforms that talk about reading news and get paid, something like that. They are hilarious though, but what do you think of them.
Thank you Ope, you really touched exactly were ‘am going, scams here and there, ever I haven’t been a victim, ’cause ‘am contempted with any little I have, a friend mentioned cowrywise when he was troubled by Lastma, and came to me for assistance, we started by talking of investment, then he said of your scheme a,and show me some proof, meaning it was not pay50k nd gets 100k of a type on social media, we discuss to the extent of showing me his transaction, then I was convinced, he sent the application to me on my WhatsApp, I then further, is a such of Relief, ’cause the amount I put in is an average of what I spent on enjoying myself daily.
How it is work,
This is d reason why I don’t want to invest my money to this platform, because am also a victim to mmm.
Good afternoon Ope, how do you guys generate the percentage you add to our money, like what do you guys actually do for you to just dash us 7.5% for just keeping our cash ?
Please I’ll appreciate an answer.
Good afternoon Ope,
I’ll say knowledge leads, as getting rich quickly without stress or risk is obviously a scam.
Please, how can I create a one-month fixed investment? The least I can find is three months.
Wow, this is really educative, thanks for the tip.
Hello Ope, thanks for always looking out.
This ponzi scheme mindset sticks very easily(putting money in something and expecting returns at the speed of light). If I want to change it I’d need to understand investment from basics.
Seeing as you have some knowledge concerning investment, What Do You Suggest I Do?
Thanks for the info.
Thanks for this ope. I enjoyed it. And it was very informative too. Learnt a few things. Thanks again.
Thanks dear Ope.
Making money is not an easy thing, let’s be careful scammers are everywhere.
Thanks miss or Mrs ope….you are right with it all..
Although making money is not been easy is all about risk taken, and as well one need to be aware of scammers
Accurately insightful…
I love reading this Ope. My friends has being victims to ponzi scheme,
i would have, if I didn’t have so much fear on investment and it risk.
Am happy I did investing with your company.
I didn’t invest much but, as I get to understand how investment works, better. I will be an investor down to my last.
What a write up from OPE,
This is good and my doubt has been cleared because is like you read my mind regarding investing
This is nothing but the total truth.⚡?
It’s high time Nigerians awake out of sleep regarding investment and Ponzi schemes.
Cowrywise ride on with the good works ???
Nice piece Ope!
I usually find your write-ups very explanatory.
Thank you.
Good read, but where is the question you promised I will answer. This is new year Ope!!
I sincerely appreciate this post. My eyes have been opened ? like literally.
Thank you Cowrywise.
Oh that’s good, very good coz this is the same thing trying to happen to me right away.. there’s this guy trying to introduce me into cryptocurrency online business buying and selling stuff..the question is should I continue receiving from him?
This is so accurate ?
What is the minimum amount you can invest
Hi Eniola.
There’s no minimum amount you can begin investing with.
Start from the amount you’re comfortable with and grow from there.
Need more info about the investments currently available on Cowrywise? Please, check here – https://cowrywise.com/mutual-funds
Hi Ope good day, please I would like to know. How do you come up with great contents like this? Please teach me the secrets.
please what does fraudulent referral mean??
I want to know and be enlightened
Because most of my friends and myself was not paid our referral bonus because we were accused of making fraudulent referrals which we don’t understand and hence we were permanently banned from using Cowrywise after we have saved and spend much effort and time to refer people.
How can one get his referer bonus, have refered people but wasn’t paid jan31 as said by cowry wise
Thank you cowrywise acording to the question…… Knowledge shall lead why greedy shall serve under the sand knowledge stand on
Have they given u profit from ur investment