A CFD (Contract for Difference) is an agreement between two parties; a client and a provider, to exchange the difference between the opening and closing value of a trade.
When trading CFDs, you do not own the share, but you still receive many of the benefits of ownership; including price performance and dividends.
Trade Global Market is here to help you to hone your CFD trading strategies, to hedge your portfolio exposure and to get the best possible return on your investment.
A CFD is a contract between a trader and a broker, and derives its value from another underlying security. Trading CFDs offers many benefits. For example, it’s not necessary to outlay the full amount in order to have access to the underlying stock, index or commodity price movements. This is due to the fact that you are trading on margin, and only need to invest a small percentage of the actual price.
The margin you put up to open a trade (normally given as a percentage) depends on the CFD provider you select, in addition to the liquidity of the underlying share. You may need to place additional margin if the position moves against you; due to the fact that you must have sufficient funds to cover running losses and maintain the initial margin.
CFD trading provides the opportunity to make a much larger return on your initial investment. However, losses are magnified in exactly the same way as profits, and it is important to be aware of the financial risks involved. Trade Global Market offers a number of webinars, one-to-one sessions and educational resources to help you to become familiar with CFD and to trade with confidence.
CFD trading can be a short-term or a long-term trading option; which, if applying proper risk/reward strategy, can offer significant rewards. If you want to set up a trading account, or want to find out more about how Trade Global Market can help you reap the benefits of CFD trading, simply get in touch with us today.