CFD TRADING INFO.NET
THE CFD AUTHORITY
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Welcome
Welcome to the Authority website on anything CFD's(Contract For Difference), CFD Trading and Spread Betting.
Our aim is simple. To produce the most up to date informative and easy to navigate site on the trading phenomenon that has taken the world by storm and continues to at an amazing pace called Contract For Difference , or more commonly referred to as CFD's.
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Above you will find a menu that contains a link to the 5 main areas of contract for difference trading. From the providers of CFD's (which is split up into 3 countries), to our own unique forum for discussion on hot stocks, potential trades and anything to do with CFD's. It's also a great place to learn about CFD'S and CFD traders experiences.
Weather you're a beginner to the world of CFD's or a seasoned trader you will be sure to find it here.
We hope you enjoy!
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Contract For Difference
So what are these CFD's that are taking the world by storm and why are they so popular?
And how do you get a piece of the action?
Well a CFD is the abbreviated version for Contract For Difference and these contracts work on a very simple principle.They are a derivative product and mirror the stock market and the underlying stock prices exactly. You make a profit or take a loss just as you would based on the underlying stock price. Contract For Difference simply refers to the fact that when you open a position(CFD) you enter into a contract for the difference,wether it be a profit or a loss at the time that you close that position.
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The huge benefit with CFD's is that for a small deposit the client can open up a position up to 20 times larger than the initial amount outlaid therefore potentially creating huge profits and accessing trade sizes that would normally not be able to be achieved. Obviously this also works the other way and greater losses can also be achieved so diligence is required.
For example ,instead of purchasing 1,000 shares of Coca Cola from a stock broker, a client could instead buy a CFD on Coca Cola on a trading platform. A $5 per share rise in the price of Coke would translate to a $5,000 profit for the client, just as if he had purchased the actual shares that are traded on the exchange.
Therefore the client is able to have a large portfolio of CFD's without tying up huge amounts of capital.
Aside from the main benefit of CFD's which is the huge leverage potential, most company's providing a CFD service offer very competitive brokerage fees(equivalent to normal stocks.)
Most CFD providers have a good trading platform which can be accessed after signing up and is normally in real time.
Another benefit of CFD's is the ability to buy a "Guaranteed Stop Loss". You pay a small premium for this but have a pre determined price that you are guaranteed to be sold out at.
For example you buy 10 000 ZYZ at $1.00 and when you wake up the next morning a natural diaster overnight has brought havoc to the stock market. Your stock opens up at 0.42 cents. It doesn't matter. You bought a guaranteed stop loss at 5% below the price you bought the stock at so your holding of ZYZ gets automatically sold out at 0.90 cents. No sweat.
Short Selling-Another benefit of CFD's is the ability to go short on stock and indices with ease. Shorting is where the trader or punter expects a stock or market to fall and goes short on a stock instead of long. This way you can easily profit from a falling stock or bear market. When you go short you also get paid interest.
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