That's not a CFD, it's a call option...
You are right,
this is an example of CFD.
It's the same thread.
Yes, thanks for pointing it out.
No idea what just happened. You give a supposed example of a CFD, I say it's not a CFD, then you give the same example again?
I believe that a call option if for the total amount, this agreement is only for the difference, so I do not need to provision the whole amount. Anyway, I'm not so familiar with the exact definition of each instrument, so feel free to call it whatever you wish.
What matters is not how you settle it, but how the profit responds to price changes of the underlying. With an option to buy 10K LTC at a strike price of $6, if LTC price is $7 when exercised the profit is $10K, just like in what you offered.
See also the graphs
here. You're taking a short call, the counterparty is taking a long call.
A
CFD is completely different and is equivalent to simply buying the commodity. The corresponding graph would be a straight line through the origin.
If you're offering call options and saying you're offering CFDs it's misleading.
