What are the benefits of using CFD’s to hedge exposure to an underlying asset rather than using options or futures?
CFD’s provide a linear payoff: a rise or decline in the underlying asset will result in an equivalent rise or decline in a trader’s account balance. Also, unlike options, there are no initial premiums that need to be paid. Another benefit to hedging with CFD’s is that there are fewer trading restrictions and no need to obtain access to multiple exchanges.
