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CFD Trading: Futures vs Spot vs Option markets

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@andy_colgate_nottinghill - 3 hours ago - Forex Education

From what I know, when trading CFDs on any instrument, it is possible to opt to trade CFDs on Futures, Spot or Options if your broker offers all three. Now my question is what is really the difference between these 3 ways to trade while using CFDs?

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@paul_petit - 3 hours ago

CFDs allow you trade either three of the markets you mentioned which are: spot market, futures market or options market.

The spot market has lower spreads than the futures market but is less transparent and attracts overnight swaps if you leave your trade open till the next day. So, the spot market is ideal for day traders.

The futures market has wider spreads but the fees can be lower especially because there are no costs for holding trades overnight.

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@yokoyi - 3 hours ago

The spot market price is usually different from the futures market price. Let me attach a screenshot of my brokers Natural Gas product catalogue. The first item on the screenshot it the Nat Gas spot, the rest are Nat Gas futures. You can choose any one you want to trade but the spot price will be different from the futures price and so will their spreads be different too

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