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A structured trading curriculum across stocks,
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  • 08Build Your Trading System

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Home>Courses>What is Trading?>Lesson 6 of 8

CFDs and derivatives

Trade price movements without owning the asset. Powerful, and easy to misuse.

What is Trading?·Lesson 6 of 8

All lessons

By the end of this lesson you'll be able to:

  • 01Explain what a CFD is
  • 02Describe how CFDs differ from owning the asset
  • 03Recognize the risks of leveraged derivatives
1

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is CFD Trading? A Complete Beginner's Guide
Key terms
CFDLeverageNegative Balance Protection

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

  1. Question 01

    What does a CFD let you do?

  2. Question 02

    When you trade a CFD, what do you actually own?

  3. Question 03

    With a CFD, what can a trader do?

  4. Question 04

    You expect the price of oil to fall. Using a CFD, how can you profit?

  5. Question 05

    Because CFDs are leveraged by default, what happens to gains and losses?

  6. Question 06

    You open a CFD giving $10,000 of exposure at 10:1 leverage. The margin required is roughly:

  7. Question 07

    You hold a leveraged CFD position overnight. What should you expect?

  8. Question 08

    A beginner opens a large CFD position that moves against them. Without negative balance protection, what can losses do?

  9. Question 09

    Why does negative balance protection matter?

  10. Question 10

    Why are CFDs popular with active traders?

Answered 0 of 10 · pass 70% (7/10) to complete

What is Trading?6 of 8
  1. Trading, explained
  2. How the stock market works
  3. How stocks actually work
  4. Intro to forex
  5. Futures basics
  6. →CFDs and derivatives
  7. Options basics
  8. Bull and bear markets
  9. ⚑Final Assessment· 20 Q