THE BENEFITS OF CFD TRADING About CFD Trading Contract for Difference or as it is shortly known as CFD is the contract that is signed between two parties, namely the buyer and seller. Its price is strongly connected to the underlying asset like an equity index, a single stock and commodity futures. Being firstly traded in early 1990 on the stocks of London Stock Exchange CFDs were obtainable only to the institutional traders. They used them to hedge their exposure on the underlying asset. However, already at the end of 1990s CFDs became widely accepted by retail traders and they go on to attract numerous traders up till now. A lot of advantages such as leveraged positions, low costs and time saving benefits have contributed highly to the development of CFD market. The latter provides a great number of financial tools including stocks, commodities, derivatives, equity indices and currencies to bonds.
While deciding to close the position the parties take into account if the asset price has increased, the seller is going to pay the buyer the difference between the initial value of asset and its current value. Otherwise, i.e. in case of the decrease in asset value itâ€™s the buyer who pays. CFD is a unique opportunity for traders to get experience on various assets. They can take long position when the price moves up, and short position when the price goes down.
WHY TRADE CFDS? CFD trading is actually more beneficial than trading the given asset directly. It is featured with the following benefits: • • • • • • • • •
Highly liquid assets and quick access to a number of markets through one brokerage account Possibility of opening leveraged positions through margin which helps to enhance the profits Cost reduction because of the lack of taxes and hidden commissions Unlimited opportunities of taking long or short side trading Possibility to trade easily from diverse parts of the world Availability of 80 and more commodities, CFDs on stocks and major Equity Indices Accessibility of unique Golden Instruments Unique swap terms Continuous trading of Index CFDs after the closure of stock exchange.
WHY TRADE WITH IFC MARKETS ? •
IFC Markets offers beneficial conditions for CFD trading: Trade More 80 trading Instruments - Stock CFDs, Index CFDs and Commodity CFDs. Leverage – 1:40
• • •
100% Dividends Payout
0,1% Charge on Stock CFDs
Unique swap/rollover policy - based on free-borrowing concept of non-currency assets Unique ability of trading Index CFDs - even after the stock exchange closes Unique ability of trading continuous Commodity CFDs - without the need to follow expiration dates
One of the advantages of trading CFDs with IFC Markets is that it offers two CFD trading platforms – MetaTrader 4 and NetTradeX.
How to trade CFDs? On the trading platform NetTradeX itâ€™s possible to find Commodities, Stock Indices and CFDs on Equities including one hundred trading tools. The whole concept and procedure of CFD trading is quite simple and has much in common with traditional currency trading. The trader buys CFDs expecting an increase in price value of the underlying asset or similarly sells them anticipating a decrease in the price of the underlying asset. This is the main factor of CFD trading as due it traders can make a profit depending on the market movement up and down. The next essential feature of CFD trading is that it is traded on a margin basis. In other words a trader has a chance to open a position by depositing a very small portion of the total contractâ€™s value based on the type of account and on the contractâ€™s margin requirements. However, together with the increase of profit the probably of losses also rises. Hence traders should keep funds to accomplish any undesirable move against their position and maintain margin requirements to keep the position open.
Published on Oct 29, 2013
Contract for Difference or as it is shortly known as CFD is the contract that is signed between two parties, namely the buyer and seller. It...