My brother’s friend apparently invested in a CFD for oats. I’ve heard of them but don’t really understand how they work, what is he doing beyond guessing the future price of oats? How does that make money?
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“Hey, I want to speculate on the price of oats but I don’t actually want to buy any oats. Let’s you and me just make a bet on the side. Three months from now, you pay me whatever I *would have made* if I’d bought a bunch of oats today. If the price goes down, I’ll pay you what I *would have lost* on that investment.”
Guessing the future price of oats is precisely what he’s doing.
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