What benefit do investors gain from CFDs without holding the underlying asset?

Investors engaging with Contracts for Difference (CFDs) benefit from capital gains through indirect exposure to the underlying asset without needing to own it directly. When investors trade CFDs, they speculate on the price movement of the underlying asset; if the asset increases in value, they can potentially realize profits based on the price difference at which they entered the position and the price at which they exit it.

One of the advantages of CFDs is that they allow for leveraged trading, enabling investors to control larger positions with a smaller amount of capital. This means investors can amplify their potential gains from price movements. Since they do not hold the underlying asset, they avoid some of the obligations and considerations that come with ownership, such as dealing with ownership rights or dividend payments. Thus, the gains realized from the fluctuations in the asset's price form the essence of the capital gains investors achieve through CFDs, making this option the correct choice.