cfd trading
A CFD (contract for differences) is a contract with the mediation of authorized and regulated broker, for example, such as Zerich Securities Limited.
The purpose of cfd trading is to receive the difference between the price of the contract at the moment of opening and closing positions. The price of the CFD is tied to the price of the underlying asset, which is the basis of the contract, but the opening and closing of positions on CFD does not lead to physical posture of the underlying asset. The amount of the underlying asset in one contract varies depending on the market and indicated in the specifications of each specific CFD. As the underlying asset may be stocks, stock indices, bonds, commodities, interest rates and currencies.
cfd trading has the following advantages:
The opportunity to earn as in the growing, so and in a falling market.
An extensive choice of markets and instruments.
Low requirements for the positions thanks to trade with the shoulder.
Low Commission and the rate of funding
The CFD does not apply stamp duty, as in the case of the British shares
The flexibility and convenience of trade thanks to a specially developed for CFD trading system
Absence of payment for access to the market
The savings in transaction costs due to the lack of physical delivery of the underlying asset.
Participation in the dividends on the shares of
CFD deservedly enjoyed high popularity in Europe due to the simplicity, small costs and greater flexibility compared to other alternatives. CFDs are suitable for the majority of trading strategies, including algorithmic, and be a good addition to your existing investment models.
CFDs have been created in order to simulate the trade in shares, but exclude the fact of ownership of shares, which can have significant costs. This derivative financial instrument, which allows you to get profit from changes in the price of the underlying asset without significant cost of capital. At the same time he bears in itself such advantages for active traders as the opportunity to earn the rising and falling markets, the use in trade of the whole range of instruments of goods to interest rates, as well as the use of a leverage of up to 100 to 1.
CFD is a product with a credit shoulder and may not be suitable because of this, for some investors. CFDs are a high risk to your capital, which may lead to losses exceeding the amount of the initial investment. You must use only those means that you can afford to lose in case of unfavorable development of events. Please make sure that you fully understand the risks that accompany trade CFDs, or get advice of the independent expert, if necessary, before you make a deal with the CFD market.
