The amount of money that a trader earns on an asset or security, as measured by a percentage rate of annual dividends, is the yield. As a general rule, the lower the risk, the lower the yield potential, and stocks are seen as higher risk investments (with correspondingly higher yield potential) than bonds. In most cases, a potential yield does not guarantee a return on the investment, but rather reflects the prediction of the future performance of the asset.
Forex and CFD traders are able to use potential yields as one of the indicators regarding the projected performance of an asset. Depending on the asset, some traders reinvest the annual yield into additional assets, while keeping the principal in the original, thus enabling themselves to earn additional yields rather than use the dividends at that time.