What are CFDs?
A CFD (Contract for Difference) is an agreement between a buyer and a seller stating that the seller will pay the buyer the difference between the value of an asset at the time the agreement was made and its present value. CFDs have become very popular amongst traders.
HighFxMarkets offers you a wide variety of CFDs to choose from.
Many investors use CFD because of its operation as a way to hedge their existing portfolios through periods of short-term volatility. If you have a long-term portfolio you want to keep and you there is a short-term risk to the profit of your investments, you can use CFD contracts to reduce the short-term loss by hedging your position.
When your portfolio decreases in value, the profit you gain from CFD contracts could help you balance out those losses, thereby helping you hold on to your portfolio without provoking any big loss in value.
The profit you gain from CFD contracts could help you balance the possible losses if your portfolio decreases in value. This can help you to hold on to your portfolio without provoking any big loss in value.
- Can take both long and short-term positions.
- You can trade on the price of a product both going down and up. That’s
how a CFD works.
- You can profit both from a bearish market by selling and from a bullish
market by buying.
- Significantly lower margin requirements for CFDs.
- Immediate execution guarantees that your transaction will be fast and
HighFxMarkets provides three trading platforms - MetaTrader 5, Mobile trader and Web Trader - to help you trade online easily and from every device.
To feel the movement of the CFD contract you are trading and the CFD trading strategies and tips for best performance always stay up-to-date on market news.
An in-Depth Analysis on CFD Trading
Choosing CFD trading, traders can use many reliable strategies. Besides, HighFxMarkets will guide them through the many benefits CFD can offer and so much more.
What is CFD Trading?
CFD trading /contract for difference trading/ targets the movements of the instruments rather than the instruments themselves. The unique benefit CFD offers is that, if you predict correctly and buy accordingly, you can gain funds both when the price goes up and when it goes down.
You go ‘long’ and buy if you believe a rise in the price of the underlying instrument is coming and make a profit on the coming gain. And you go ‘short’ if you believe the price will fall and when it really falls, you still profit from the correct prediction.
Selling short is the different approach to trading that CFD trading offers. The sensibility and accuracy of your predictions of the movements, the of your lot (‘position’) and the actual significance of the market movement shall determine your gains/losses.
If you have experience with the Forex market, you will find the similarity with the CFD trading. Leveraged buying and selling for CFDs - a CFD strategy that can pay off very well if used correctly - is allowed by many brokers and trading platforms as well.
What markets can you trade CFDs on?
You can trade CFDs on the following markets:
CFD trading works the same way on any of the above platforms. But you still have to familiarize yourself with each and every one of those platforms because they have their differences.
The Advantages of CFDs Trading
- The reason why it's becoming so
popular and also one of the main advantages of CFD trading is that you can gain
profit both when the market goes down and when it goes up. You can sell short
and still make a profit.
- CFD trading also allows you to
use leverage, i.e. entering the market for only a fraction of the cost of the
- CFD trading is also preferred
because of its convenience and the lack of a fixed lot and the risk
reduces immensely as you don't own the actual commodity.
- Like most of the financial
strategies, CFD trading offers a good opportunity for portfolio
diversification, which is always good.
Excited? Test your CFD strategies and start trading CFDs with HighFxMarkets today!