trading online

Both forms of investment have some things in common. However, a closer look also reveals differences that distinguish each product. In the following, you will learn which of the two instruments performs better in a direct comparison.


If you compare contracts for difference with certificates, you will quickly see that CFDs are characterized by simple and transparent pricing. The value of the underlying instrument is replicated 1:1 in contracts for difference. With certificates, on the other hand, various factors can influence the value of a certificate and thus CFDs are far more suitable, especially for inexperienced traders, due to their uncomplicated structure.


Certificates also have certain conditions attached to them in many cases, and only when these conditions occur can you make a profit on the certificate. CFDs have an advantage here as well: when trading contracts for difference, the price either goes up or it goes down - and these are the only conditions that determine profit or loss.


Leverage certificates also have a so-called knockout barrier. If the underlying touches this barrier, the certificate expires worthless. In CFDs, a position is closed only when the amount of margin is no longer sufficient to meet a certain margin obligation.

forex broker


Contracts for difference can be traded in small quantities compared to certificates, which results in cheaper trading fees.


Another advantage of CFDs is that most types of CFDs do not have a limited maturity. Therefore, you are free to decide how long you want to hold your positions.


Overall, the purchase of CFDs is cheaper than the purchase of certificates, because the transaction costs are lower in most cases.


Most certificate variations are also not suitable for day trading and are therefore more suitable for medium to long-term investors. Contracts for difference, on the other hand, are not suitable for long-term investments, as they incur financing costs for each long position held overnight. Depending on the duration and the underlying asset, these costs can make up a large part of the trading costs and also reduce your profits significantly.

Another point in favor of trading with CFDs in is the fact that there are usually very low transaction costs and full transparency in pricing at all times. Also, the variety of available underlyings is a plus point as well as the associated fact that every private investor can act quickly and easily on the global markets. Everyone can decide individually which form of investment they prefer, but generally speaking, CFDs have more advantages than certificates and other comparable leverage products.