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CFD Stocks Explained

22 September 2022

If you want to learn about CFDs and are willing to dig deeper into CFD Stocks, you are in the right place. The article simplifies the technical aspects of CFD Stocks and helps developers find practical ways to source data to augment features of their trading platforms and apps.

Stay tuned to enhance your know-how of CFD stocks and understand the role of OTC Stock data API in your trading verdicts and app capability enhancements. 

Understanding CFDs

CFD stands for ‘Contract for Difference.’ A trader and a CFD broker enter into a time-bound contract. Both parties agree to exchange the difference between the opening and closing value of the financial instrument or asset.

Notably, in this scenario, the traders don’t need to own the financial instruments, but they profit by anticipating the rise or fall of the value. That way, the trader or investor has an opportunity to make a profit by the price movement of the financial instrument without actually buying or selling it. 

You can speculate on the price movements across various financial markets, including stocks, forex, and commodities. 

What Are CFD Stocks?

In CFD stocks, the contract relies on the difference in the value of the stocks. Stocks are the underlying financial asset for the contract. A trader and a CFD Stock provider agree to exchange the difference in stock price.

Instant access to reliable and accurate CFD data helps make informed CFD stock trading decisions. The traders must study this marketplace, work out their trading strategy, analyze the market trends, and choose the best opportunities. 

How are CFD Stocks Different from Usual Stocks?

Let’s discuss the differences between CFD stocks than usual stocks:


As you invest in stocks, you own a company partially by becoming its shareholder. However, you don’t need to buy the underlying stocks when trading CFD Stocks. You enter an agreement with the CFD provider by speculating the rise or fall in the stock prices.

Trading Mechanism

Trading in stocks takes place in stock exchanges across the world. However, CFD stocks are not accessible through any centralized exchanges. It is a contract to track the stock performance between you and the CFD provider. CFD stocks are traded over-the-counter (OTC) through a network of brokers. Still, you can access many marketplaces to trade CFD Stocks. 

You must own or borrow stock to sell it. However, to sell a CFD stock, you neither need to own nor borrow it. 

Actual Investments

For investing in stocks, you need to purchase the shares at market value. However, CFD trading allows you to trade on ‘leverage’ by depositing a margin of your trade value to open a position. You pay a set fraction of the trade value to open a trade position. However, leverage opportunities add risk, as you may lose your money if the stock prices move in the opposite direction.

Traders agree to pay the difference between the stock prices when the trade opens and closes. You do not pay the heavy brokerages, as you do not buy stocks. CFD providers usually charge a reasonable commission. 

What is CFD Data? How is it Used?

As discussed earlier, a Contract for Difference (CFD) involves speculation of the price movements of underlying assets without actually owning them. CFD Data includes streaming and historical prices of various underlying assets, including stocks.

How Traders Benefit from CFD Data

Traders don’t need to spend time acquiring raw data from different sources. Curated, reliable, and accurate CFD data helps traders parse complex market information. They can use CFD data to:

  • Conduct in-depth CFD stocks market analysis, 
  • Draw trading strategies
  • Make informed CFD stock trading decisions.
How Developers Benefit from CFD Data

Developers can use CFD data to empower their custom robot CFD trading applications. They can integrate CFD Data API into their apps so that users can retrieve accurate information. The following are benefits of CFD data for developers:

  • Data retrieval features and seamless, lag-free trading operations will enhance the overall performance and user experience of their applications, websites, and other trading solutions. 
  • Data-sharing and execution of pre-defined processes become swift. Developers can build new programmatic interactions on their apps.
  • You can enable streaming capabilities through the library, and the API will push data in JSON format. The mechanism enriches your application by providing access to live streaming CFD market data for stocks. 

These added features provide an excellent user experience, as subscribers can easily retrieve valuable CFD data, draw winning strategies and place their trades through your trading platforms.

We obtain data from reputed over-the-counter CFD brokers and curate it to ensure the best quality. We provide live and historical CFD Data API via WebSockets and JSON REST API. 

You can also obtain stock indices, energy, commodities, and precious metals prices.