CFD Trading
Contract for Difference
CFD or 'Contract for Difference' are agreements to buy or sell a specified asset that typically lasts for one or two months.
Commodities and indices such as Natural Gas, Oil and the NASDAQ can be bought and sold as CFDs.
Each CFD has its own market hours. As well, each CFD has an expiry date when all open trades will automatically be closed at 20:00 GMT
whether in profit or loss.
- Longer Trading Hours
Trading CFDs provides you with a distinct trading advantage with more hours of the day to trade than trading directly through an exchange.
- Live Prices
CFD trading is delivered using live prices and without the delays of normal stock trading. For example, if you wish to buy a commodity such as Crude Oil you would typically need to wait for the quote.
- Efficient use of Capital
Trading CFDs provides you with leverage. This means that you can trade with $50 or more for every $1 in your balance, allowing you to increase your exposure with less initial investment. For example, open a Gold Account with $5,000 and you'll have $250,000 available for trading CFDs.
- Profit when Markets Rise or Fall
While currencies can be influenced by a wide range of factors, indices react more directly to specific market data. For example, when the Consumer Price Index (CPI) in the UK falls below expectations we can expect the FTSE to follow suit, thus profiting by a falling market.
- Profit on Better Performance
CFDs can be traded in pairs. This is a popular way to profit on the expectation that one stock market will outperform another. To trade CFDs in pairs simply open a long position on one index and a short position on the other. It doesn’t matter if the markets rise and fall in pair trading, only that one index outperforms the other.
