LONDON, June 21, 2012 /PRNewswire/ --
The Introduction to CFD Trading guide is ideal for new traders looking to take a position on the financial markets using CFDs.
Through a range of trading platforms, City Index clients can trade CFDs on over 10,000 financial instruments for only a small initial deposit.
Introduction to CFD Trading
In the following guide, we answer common questions around CFD trading and offer you tips and guidance on how to take a position on a financial market.
Below, you will discover:
- What a CFD is
- How CFD trading works
- Why traders trade CFDs
- Who you can trade CFDs with
What are CFDs?
A CFD, or 'Contract for Difference', is an agreement between two parties to exchange the difference between the opening and closing price of a contract.
How are CFDs Different to Standard Trading?
As a derivatives product, CFDs allow traders of all levels to trade on live market price movements without owning physical shares in the underlying instrument on which the contract is based.
In order to trade CFDs on a financial instrument, CFD traders are required to deposit only a small percentage of the total value of the contract.
In addition, traders can potentially profit from not only rising prices in the market - but falling prices also. This is because CFDs enable traders to go both long and short on a market's future price movement.
Can I Profit from Trading CFDs?
Yes, you can.
Through a City Index CFD trading account, you can take a position on over 10,000 financial instruments, including the FTSE 100, Wall Street, German 30 and France 40.
As mentioned above, you can potentially profit from both rising and falling markets.
If you believe a market will rise, you can go long and buy a CFD trade.
If you believe a market will fall, you can go short and sell a CFD trade.
In the event the market moves in favour of your position, you will profit. However, if it moves against your position, you will incur a loss.
Note: As a leveraged product, you do not own shares in the underlying instrument and can incur losses greater than your initial deposit. Ensure you full understand the risks before placing a trade.
Start Trading CFDs with City Index
Start trading CFDs with City Index in 3 easy-to-follow steps. Simply:
- Apply for a CFD trading account online
- Deposit funds into your CFD trading account
- Trade CFDs through their range of trading platforms
To begin, apply now for a CFD trading account.
Free CFD Trading Tips
If you found this article helpful, you can find a range of free CFD trading tips, guides and articles through the City Index website.
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. We provide access to a wide range of instruments including margined foreign exchange, Contracts For Difference and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk for details.
SOURCE City Index