Understand what you trade before deciding how to trade.
3 lessons · ~12 min · Introductory level
LESSON 01 / 03
An asset and exposure are different
01Share: ownership
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02CFD: contract
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03Different rights
Connect the concepts
A share represents ownership in a company. A CFD is a contract linked to an asset’s price change: it does not transfer ownership of the share. Similarly named products can have different rights, costs and risks. Before opening a position, read the instrument description and identify exactly which contract you are trading.
Price reflects buyers and sellers willing to trade. Earnings, interest rates and expectations can change that willingness. A good company can have a falling share price; positive news may already be priced in. Compare the announcement with expectations and check the source and date.
Pause to check instrument, currency, size, costs and trading hours. The spread is the gap between available buying and selling prices. Commissions and financing may apply separately. Check your instrument’s terms: this course does not define the commercial conditions of a Trade America account.