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CFDs Online |
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CFD trading is one route to speculating on the global financial markets including:
- Shares
- Stock Indices
- Forex
- Commodities
- Bonds
- Interest Rates
CFDs are an agreement you make with a Contract for Difference provider to exchange the difference between the opening and closing values of a particular trade.
CFD Trading - How does it work?
- You choose the asset you would like to trade, eg a particular share
- You determine whether you want to speculate on the market's value to rise or fall (ie whether the share price will go up or down)
- You open your CFD
If the market does move in the direction that you predicted, you make a profit of the difference between the two prices multiplied by your stake.
Should the market fail to move as you expected, you would instead lose the difference between the two prices multiplied by your stake.
Also see: CFD share trading example.
CFDs Online - CFD Advantages:
Contracts for Difference are margined products. This leverage can be both a benefit and a drawback.
- You get the full exposure to any price movements whilst only investing a portion of the required capital. However, this also means that you can lose more than your initial capital investment.
- One way to limit your potential losses on a trade is to make use of a Stop-Loss. These orders are useful as they help manage your risk but do not restrict how much profit you can make. Note that not all Stop Loss orders are guaranteed.
- When trading CFDs online, investors are exempt from UK stamp duty. This makes Contracts for Difference an attractive investment method. Note that Tax laws can change and depend on individual circumstances.
Where to Trade CFDs
You can trade CFDs online with:
Contracts for Difference (CFDs), margined forex and financial spread trading are leveraged products and may not be suitable for everyone. Losses can exceed your initial deposit. Please ensure that you fully understand the risks involved and seek independent financial advice where necessary.
CFDs Online, last edited by W.Winter, 22-Dec-11.
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Warning: Contracts for Difference (CFDs), margined forex and financial spread trading are leveraged products and may not be suitable for everyone. Losses can exceed your initial deposit. Please ensure that you fully understand the risks involved and seek independent financial advice where necessary.
The contents of this website are for information purposes only and not intended as a recommendation to trade nor does the content constitute investment advice. All reasonable efforts have been made to present accurate information. Neither CFDs-Online.com nor any contributing company or individual accepts any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.
* Tax law is subject to change. It can also differ if you pay tax in a jurisdiction other than the UK.
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