CFDs verses shares trading

CFD is a type of high risk trading modern instrument. The main element of the trade is leverage where the trader sells on margins as one pays only a part of the full value. Shares are traded only when the prices are growing but these can be traded in opposite ways.  Losses and profits both can be high, and market directions can be opposite to the trade movement. One get dividend for CFDs but it has no voting rights.  One can put say about 5 per cent of the total value of the asset and trade on risks.  These platforms allow trading in both local and international markets.

Trading in CFDs means the owner of the asset is not actually holding the asset because the rate of the asset can be extremely high. One trades on leverage where the opportunities for growth are high.  It is highly flexible option and allows trading in forex, commodities, shares and other markets.  Some of the leading providers of CFDs provide customer support where the investors can get information related to configuration of the account and methods to execute - buy or sell - a share or commodity. Tools are offered by online trading platforms to reduce risks. One can close at profits or stop when the value suddenly falls or one can put a trailing stop on trade.

Many young traders are adopting these methods of trading and speculating in fast moving global markets across the commodities, treasuries, currencies, indices of global markets and since, the factors are multifarious, the risk is high.

These methods are increasing including additional instruments (more than 10,000) for a single trade account. Crypto is one such opportunity where the unpredictability is very high as the currency value is extremely volatile. Since the buyers of crypto currency have to undergo a series of verification to own the real currency – the method of leverage offers opportunities to trade without owning the currency.  

CFDs and futures in CFDs are widely affected by global changes such as elections, forex, political changes, and economics factors etc. Many companies release results outside the trading hours and this can affect the asset value.  

Technological support

Companies such as Naga Trader, Zulu Trader and Plus 500 offer advanced traders with options to close on profits or loss. These are technically advanced platforms which are evolving into mainstream platforms. Most of the apps provide a good source of information, news updates, trends and other details to support informed trading.  

Risks  

Investing without prior knowledge or taking risks without understanding the market can results in huge loss. Although, these can get dividends (if invested in shares) there is no meaningful dividends offered on such trade.  The short term investment into CFDs, future, options, spread bets or turbo warrants are zero balance game where the profit made by one trader is the loss of other.

One should use platforms where the trading fee is lowest and should invest in low-risk instruments.

To find out more about CFDs, click 99 Alternatives at (http://www.99alternatives.com).