Effective Tips for Trading CFDs on Popular Financial Markets

LONDON, June 8, 2012 /PRNewswire/ --

Trading CFDs with City Index enables traders to take a position on the future price movements across thousands of global financial markets. Find out how and start trading CFDs today.

Introduction to CFD Trading

A Contract for Difference (CFD) is an agreement made between two parties to exchange the difference between the opening and closing price of a contract.

As a derivatives product, CFD trading sees investors take positions on the live market price movements of over 10,000 financial markets without having to own shares in the underlying instrument on which their contract is based.

In turn, this allows those trading CFDs in the UK to be exempt from paying Stamp Duty* on all profits made through their CFD trading account.

Who can trade CFDs?

Men and women of all ages and background can trade CFDs either full-time or part-time around their daily lifestyles.

They do this through the City Index CFD trading platform which is accessible 24-hours a day, 7-days a week through a downloadable, online and mobile trading platform; allowing them to trade the opportunity as they see it.

Using CFDs, they speculate on the future price movement of markets that include the popular FTSE 100 index, shares such as Vodafone, and currencies such as the EUR/USD.

They also trade CFDs to hedge their portfolios; allowing them to offset any potential losses in value of their physical investments.

What this means for both full-time and part-time traders is access to a wider range of markets than they would have access to through more traditional forms of trading.

How Can I Make Money from Trading CFDs?

The potential for profit is found where a market moves in the favour of your position; this means that you could potentially profit from not only a market that rises, but also one that falls.

This is made possible by the ability to go long (buy) and short (sell) on a market.

If you believe the price of a market will rise, you go long and buy. If you are correct, and that market rises - you will profit in line with each rise in that market's price.

Alternatively, if you believe a market will fall; you would go short and sell. If you are correct and that market falls - you will profit in live with each fall in that market's price.

However, there are significant risks involved when trading CFDs; for example, if the market moves against your position you can incur losses greater than your initial deposit.

To avoid this, ensure you full understand the risks involved and fully analyse your chosen market before placing a CFD trade.

Free CFD Trading Tips with City Index

You can access free CFD trading tips, articles and guides online through the City Index website. Updated on a weekly basis, you can find out how to trade CFDs using examples of recent market movements.

* CFD trading is exempt from UK stamp duty. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month in over 50 countries worldwide.

You can access a wide range of instruments including margined foreign exchange, financial spread betting and CFD trading with City Index.

SOURCE City Index