Markets Trading - About CFDs
CFDs are easy to trade. Find out more about this form of online trading and how to be a successful trader on the Markets Trading platform.
Contract for Difference (CFD) is a leveraged financial instrument, which allows you to speculate on price movements of different markets, such as indices, commodities, currencies, shares and treasuries or its derivatives or value estimations.
Unlike traditional trading on those markets, you don’t need a large amount of capital to start trading – CFDs are traded on margin.
CFDs can be used as to speculate on up and down movements, as to hedge or diversify your equities of commodities portfolio without the significant collateral requirements and lot sizes associated with classic Futures trading.Although the price of the CFD usually reflects the price of the underlying asset, this isn’t necessarily the case.
The CFD market typically does not have short-selling rules. An instrument may be shorted at any time. Since there is no ownership of the underlying asset, there is no borrowing or shorting cost. In addition, few or no fees are charged for trading a CFD. Brokers make money from the trader paying the spread. A trader pays the asking price when buying, and takes the bid price when selling or shorting. Depending on the underlying asset’s volatility, the spread is small or large and typically fixed.
Features of CFD Trading
Contracts for Difference are made to fulfil most every trader needs:
- Trade on both rising and falling markets – same as Forex trading, CFD trading enables you to buy (go long) if you believe market prices will rise, or sell (go short) if you believe market prices will fall.
- Efficient use of your capital with high leverage – CFDs are traded on leverage, meaning you need only a small deposit to open your position rather than having to put down the full value of a trade.
- Extended trading hours – a number of CFD instruments is traded outside classic markets trading sessions.
- Hedging possibilities – If you expect your existing stock or commodities portfolio may lose some of its value in a short-term, you can use CFDs to cover this loss by short selling.
Markets Trading allows you to predict the future price movement of four classes of assets:
Learn How to Trade
The Markets Trading academy is a vital resource that lets you improve your strategies and techniques, whether you are a novice or an experienced trader. All our traders have access to the best educational material and tools, because we understand that diligence, experience and learning makes you a smarter, more successful trader.
and to take control of your financial destiny.