A bond is a fixed-income instrument, or debt security, and represents a long-term lending agreement between a borrower and lender – effectively an ‘IOU’. The bond issuer is often a corporation or a government, and the funds are used to finance a project or operation.
There are a number of costs to consider when spread betting and CFD trading, including spread costs, holding costs (for trades held overnight which is essentially a fee for the funds you borrow to cover the leveraged portion of the trade), rollover costs (for expiring forward positions) and guaranteed stop-loss order charges (if you use this risk-management tool).
One of the advantages of spread betting and trading CFDs is that you only need to deposit a percentage of the full value of your position to open a trade, known as trading with leverage. Remember, trading on leverage can also amplify losses, so it’s important to manage your risk.