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CFDs Trading Knowledge Assessment Questionnaire
Mr Bee
March 22, 2025
CFDs Trading Knowledge Assessment Questionnaire
Ready to test your CFD smarts? Here’s a 30-question quiz to see where you stand. It spans basics like leverage to advanced moves like market correlations. Answer these, tally your score, and find out if you’re ready:
No. | Question | Options |
|---|---|---|
1 | What’s the main perk of CFDs over stock trading? | A) Margin trading B) No UK stamp duty C) Wider markets D) All of these |
2 | Why’s spread betting bigger than CFDs in the UK? | A) Tax perks B) Simplicity C) Lower risk D) More liquidity |
3 | What’s checked for CFD suitability? | A) Finances B) Goals C) Experience D) All of these |
4 | How’s CFD margin vs. spread betting margin? | A) CFDs higher B) Spread betting higher C) Same D) Broker-dependent |
5 | Demo vs. live account pricing? | A) Simulated B) Real-time C) Same liquidity D) Unavailable |
6 | Minimum CFD trades? | A) 1 B) 10 C) 100 D) Broker decides |
7 | When might you get a requote? | A) Price shifts B) You ask C) Day’s end D) Never |
8 | CFDs are mostly used for? | A) Hedging B) Speculation C) Arbitrage D) Long-term |
9 | If a company tanks, what’s up with your CFD? | A) Closed at market B) Settled at zero C) Stays open D) Broker’s call |
10 | Big risk of short-selling CFDs? | A) Huge profits B) Capped losses C) Sharp price swings D) High margin |
11 | What’s a derivative? | A) Asset-based contract B) Stock type C) Bond D) Currency |
12 | Who trades CFDs? | A) Client-broker B) Client-client C) Broker-exchange D) Exchange-client |
13 | Same prices as the market means what model? | A) Direct access B) Market maker C) Both D) Neither |
14 | Can you trade commodities as CFDs? | A) Yes B) No |
15 | Expected vs. actual price gap? | A) Slippage B) Spread C) Commission D) Margin |
16 | Leverage’s effect on risk-reward? | A) Both rise B) Risk drops, reward rises C) Both drop D) No change |
17 | Are CFDs immune to market swings? | A) True B) False |
18 | What’s leverage in CFDs? | A) Strategy B) Cost C) Platform D) Borrowing |
19 | “Going long” means? | A) Buy, expect rise B) Sell, expect fall C) Close trade D) Adjust contract |
20 | CFDs profit from which directions? | A) Up and down B) Up and sideways C) Down and stable D) Up and limited |
21 | What’s “margin” in CFDs? | A) Cost B) Initial cash C) Loss D) Profit |
22 | “Spread” in CFDs? | A) Cost B) Margin C) Leverage D) Expiry |
23 | “Closing a position”? | A) Open trade B) End trade C) Extend trade D) Modify contract |
24 | “Guaranteed stop-loss”? | A) Strategy B) Risk-free C) Protection D) Tax tool |
25 | Swap fees tie to? | A) Profits B) Risks C) Holding time D) Leverage |
26 | What’s a “market order”? | A) Buy/sell now B) Triggered later C) Set price D) Time-limited |
27 | Risk management includes? | A) Leverage, spread B) Long, short C) Take-profit, stop-loss D) Analysis |
28 | “Leverage ratio”? | A) Cost B) Margin need C) Expiry D) Period |
29 | What lifts gold prices? | A) High inflation B) Low stability C) Strong stocks D) Optimism |
30 | Gold’s negative correlation is with? | A) U.S. dollar B) Euro C) Yen D) Pound |
Score Your Readiness:
25-30 correct: You’re well-versed—consider trading, but mind the risks.
15-24 correct: Decent grasp—brush up on weak spots.
Below 15: Hit the books before you trade.
Conclusion IF
CFD trading’s fit depends on your wallet, risk appetite, and know-how. Win rates hover at 30% to 50%, but strategy and market vibes matter as much as luck. Leverage is a wild card—80-82% of retail accounts lose money, a red flag for the cautious. Use this guide and quiz to decide if CFDs are your game and craft a plan that works.
Answer List:
No. | Question | Options | Correct Answer |
|---|---|---|---|
1 | What’s the main perk of CFDs over stock trading? | A) Margin trading B) No UK stamp duty C) Wider markets D) All of these | D) All of these |
2 | Why’s spread betting bigger than CFDs in the UK? | A) Tax perks B) Simplicity C) Lower risk D) More liquidity | A) Tax perks |
3 | What’s checked for CFD suitability? | A) Finances B) Goals C) Experience D) All of these | D) All of these |
4 | How’s CFD margin vs. spread betting margin? | A) CFDs higher B) Spread betting higher C) Same D) Broker-dependent | C) Same |
5 | Demo vs. live account pricing? | A) Simulated B) Real-time C) Same liquidity D) Unavailable | B) Real-time |
6 | Minimum CFD trades? | A) 1 B) 10 C) 100 D) Broker decides | A) 1 |
7 | When might you get a requote? | A) Price shifts B) You ask C) Day’s end D) Never | A) Price shifts |
8 | CFDs are mostly used for? | A) Hedging B) Speculation C) Arbitrage D) Long-term | B) Speculation |
9 | If a company tanks, what’s up with your CFD? | A) Closed at market B) Settled at zero C) Stays open D) Broker’s call | B) Settled at zero |
10 | Big risk of short-selling CFDs? | A) Huge profits B) Capped losses C) Sharp price swings D) High margin | C) Sharp price swings |
11 | What’s a derivative? | A) Asset-based contract B) Stock type C) Bond D) Currency | A) Asset-based contract |
12 | Who trades CFDs? | A) Client-broker B) Client-client C) Broker-exchange D) Exchange-client | A) Client-broker |
13 | Same prices as the market means what model? | A) Direct access B) Market maker C) Both D) Neither | A) Direct access |
14 | Can you trade commodities as CFDs? | A) Yes B) No | A) Yes |
15 | Expected vs. actual price gap? | A) Slippage B) Spread C) Commission D) Margin | A) Slippage |
16 | Leverage’s effect on risk-reward? | A) Both rise B) Risk drops, reward rises C) Both drop D) No change | A) Both rise |
17 | Are CFDs immune to market swings? | A) True B) False | B) False |
18 | What’s leverage in CFDs? | A) Strategy B) Cost C) Platform D) Borrowing | D) Borrowing |
19 | “Going long” means? | A) Buy, expect rise B) Sell, expect fall C) Close trade D) Adjust contract | A) Buy, expect rise |
20 | CFDs profit from which directions? | A) Up and down B) Up and sideways C) Down and stable D) Up and limited | A) Up and down |
21 | What’s “margin” in CFDs? | A) Cost B) Initial cash C) Loss D) Profit | B) Initial cash |
22 | “Spread” in CFDs? | A) Cost B) Margin C) Leverage D) Expiry | A) Cost |
23 | “Closing a position”? | A) Open trade B) End trade C) Extend trade D) Modify contract | B) End trade |
24 | “Guaranteed stop-loss”? | A) Strategy B) Risk-free C) Protection D) Tax tool | C) Protection |
25 | Swap fees tie to? | A) Profits B) Risks C) Holding time D) Leverage | C) Holding time |
26 | What’s a “market order”? | A) Buy/sell now B) Triggered later C) Set price D) Time-limited | A) Buy/sell now |
27 | Risk management includes? | A) Leverage, spread B) Long, short C) Take-profit, stop-loss D) Analysis | C) Take-profit, stop-loss |
28 | “Leverage ratio”? | A) Cost B) Margin need C) Expiry D) Period | B) Margin need |
29 | What lifts gold prices? | A) High inflation B) Low stability C) Strong stocks D) Optimism | A) High inflation |
30 | Gold’s negative correlation is with? | A) U.S. dollar B) Euro C) Yen D) Pound | A) U.S. dollar |