CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.



What is a yield?

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.

How does the yield affect forex traders?

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.

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