Why Investors Trade CFDs on Popular Markets Such as Indices

LONDON, May 29, 2012 /PRNewswire/ --

Australia ranks high among the share-owning countries in the world. This standing was confirmed by the latest share ownership study which shows that approximately 7.3 million of the adult population in Australia own shares (either directly or indirectly).

The same study identified a shift in investor behaviour (after the 2008/2009 global financial crisis) with many people now taking more control of their investment and wealth creation.

Index Trading on the Rise

CFD trading provider City Index Australia also sees the change in investor activities translate to an increase in Index and currency (FX) trading.

"We are definitely seeing a shift in trading activities over the past few years, with more traders getting more active in trading Indices and currencies," said Biyi Cheng, Head of Dealing for Asia Pacific at City Index.

With City Index Australia, traders have access to a wide range of Index CFDs such as the ASX 200 Index, Hang Seng, Nikkei 225, US SP 500, US Tech 100, UK 100 and the major European indices.

How to Trade Indices

One of the benefits of trading Index CFDs is that you're not faced with stock specific risk, which is the major risk when trading particular stocks.

For example, even if you are trading blue chip share CFDs, the price of the underlying equity could fall due to several factors. In the case of BHP Billiton, a global mining company, the share price has been under pressure due to falls in iron ore prices.

This stock specific risk could be avoided if you trade Index CFDs because you can either go long or short the index. This means you can trade whether the market is going up or down, without taking the company specific risk.

Access International Markets

Another benefit of trading indices with City Index Australia is that you have access to Australian as well as international markets. City Index traders usually trade Australian indices during the day and they may open positions in the UK or European markets after the Australian trading day. Many traders also take advantage of the US index movements.

With City Index Australia, you can trade all the major indices as well as monitor global and domestic news through their market commentaries and market analysis provided by their team of analysts and dealers. The trading of Indices and FX is a higher risk strategy and is not suitable for all investors.

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.

City Index is a leading global provider of margined foreign exchange and CFD trading. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. To learn more visit: http://www.cityindex.com.au/

SOURCE City Index Australia