The differences between CFDs and SSFs can be summarised as follows: (1)SSFs have expiry dates, typically three to six months and must be renewed if an investor wants to maintain a position. Renewal (rolling over) attracts costs. CFDs last indefinitely. (2)Borrowing costs and expected distributions (dividends) are built into the price of an SSF. In contrast, CFD holders pay interest on a daily basis and receive distributions (dividendes) in cash. (3) SSFs are well regulated and traded on the South African Futures Exchange. CFDs are unregulated and should thus be treated with more caution. (4) SSFs are purchased in multiples of 100 while CFDs can be purchased in any quantity. (5) CFDs are easier to understand and more transparent than SSFs. (6) The costs (brokerage and market makers spread) are more or less the same for both instruments and will only become significant you if you trade small quantities in high volumes. Both are geared instruments and were developed for trading and not investing. If you want to trade with borrowed money (bad idea), this is the easiest way to do it.
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