Bonds are often touted as a safer and less volatile investment than stocks, and they are therefore traditionally used to lower the overall risk in an investment portfolio. However, bonds can also be traded over the short-term, especially when you have access to the kind of leverage that CFDs typically come with. Because of their popularity among investors and traders, some forex brokers that offer stock trading also offer their clients the chance to trade bonds as CFDs.
Bonds are generally categorized into either government bonds or corporate bonds. With CFD & forex brokers, however, we are mainly talking about government bonds, particularly from highly rated developed economies. Among the most popular government bonds are the UK 10-Year Gilt, German 10-Year Bond, and US 10-Year T-Note.