Difference transaction (margin trading, contracts for difference, CFDs)

Forward exchange transaction not aimed at the acquisition of securities or goods, but merely at a possible profit from the price difference; see the definition in Section 764 of the German Civil Code. – Corresponding transactions therefore precisely map the movement between the bid price and the ask price and offer the advantage that indices, commodities, shares or bonds are traded “on margin” with a fraction of capital. The investor can either bet on rising prices (go long) or speculate on falling prices (go short). In principle, the maturities of the respective positions are unlimited; however, brokers usually require a margin call after a certain loss. – Older literature refers to an economic entity trading in the market in this way as a “stock jobber” or, using the French term for such a person, as a “setter,” sometimes also as an “agioteur.” – See agiotage, stockbroker, broker, commercials, day trading, foreign exchange trading, computerized, jobber, setter, short sale, margin call, option, option, naked, position, uncovered, commodity futures contract, speculation, spread bets, futures speculator. – Cf. 2006 Annual Report of BaFin, p. 164 f. (uncovered transactions).

Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent!
University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/