shorting xjo?, page-11

HI Andrew and everyone else,
If you were to short say BHP - regardles of whether you use options or warrants, you could only exercise or be put to on these contracts if you actually owned the BHP shares. If not and the contracts are worth anything, the issuer will pay you the cash as you do not have the shares to sell. You would also have to contact the issuer/fill out exercise notice to actually sell your BHP shares if you had them. Likewise with calls, if you wanted to exercise the contracts and buy the shares, you could OR take the money if the contracts are worth anything at expiry.
CFDs are totally different because you can never be exercised, you are only betting on and hopefully profiting from the difference between buying and selling or vice versa a contract which is priced depending on the underlying share/index etc but at no stage do you have a right of ownership (to buy or sell) the underlying.
CFD;s also have no expiry date which is somewhat safer for anyone not traded these instruments before. There is a lot of risk of large losses on any of these and you should read a lot before trading any of them and you should be rock solid on cutting losses when getting the direction wrong.