Contracts for Difference, abbreviated as CFDs, are derivative instruments which enable investors to speculate on an extensive array of monetary markets, without directly taking the ownership of the prime asset. The contract in question is the agreement between the seller and the buyer to exchange that difference which arises when the opening price of the specific asset being traded is subtracted from the closing price. This means the buyer is paid by the seller the difference between the opening price and closing price of the contract.
With Contract for Difference, the seller only pays the buyer when the difference between the starting and closing price is positive. However, in case the difference is negative, the buyer is the one supposed to pay the seller.
CFDs are always traded on margin. Therefore, as an investor you should keep the lowest limit margin level possible to ensure the position remains open. If the amount of money deposited drops below the lowest limit margin level, you will receive a margin call and you’ll be required to pay additional cash into account.
The Advantages of CFD Trading for Professional Investors
Contracts for Difference give professional investors a chance to open short and long position. As a trader, you select Long Trade when purchasing an asset that you expect its price to rise significantly. With Short Trade, a trader sells an asset expecting its price to fall drastically so that he or she can purchase it back at a lower price. CFDs offer investors with a wide range of benefits when weighed up with other, more conventional forms of investment. Here are some reasons which make CFDs a popular form of investment among most professional investors:
- The Opportunity to Trade on both Falling and Rising Markets
With CFD trading, investors get the opportunity to trade on the price of an item going up as well as down, which means they can benefit from both sides of the coin if they make wise decisions. Most professional investors use Contract for Difference as a way to hedge their existing portfolios via times of short-term volatility.
- No Stamp Duty
CFD trading is more cost-effective than most of the other types of investment because it is not exposed to any stamp duty payment. Unlike conventional share dealing, with CFDs, investors do not pay stamp duty on a trade. This is because Contracts for Difference are derivative instruments and therefore investors never take the physical ownership of underlying asset.
- Investing in an Extensive Range of Markets
If you register with a reliable online CFD broker, you’ll have a chance to invest in an extensive range of monetary markets via an online based trading platform. From just a single account, investors have access to CFDs on forex, indices, shares, spot metals, bonds, commodities and ETFs, offering a wide array of investment opportunities.
- Trading on Margin
Trading on margin helps investors to enhance their trading capital. Via the use of monetary leverage, an investor can trade the markets with just a small initial deposit. The leverage serves as a loan which investors take from their broker, allowing them to control huge CFD positions available in the market by simply investing a small amount of capital reserved as margin.
- Efficient Use of Capital
With CFD trading, traders can choose to trade utilizing margin, which gives them leverage. This indicates they can trade without necessarily putting down the entire worth of a position. As an investor participating in CFD trading, since your money will not be tied up in a single transaction, you’ll have a chance to utilize it for other forms of investment.
The Bottom Line
Most aggressive, risk willing traders consider using leverage to improve returns as probably the most crucial benefit of the CFD trading. This is because they get the opportunity to trade on margin, which means they are not required to deposit the entire amount of capital of the exposure that is taken in CFD trading account. For instance, if you’re an investor and you have a trading capital that amounts to 100K, you may only require to deposit 10K to qualify to trade the size of a 100K account.
If you are looking for a viable online investment option, choose CFD trading today and get a chance to trade any time you want. CFD trading does not have a fixed expiry date!
Leolist Sees Significant Increase to Number of Bitcoin Transactions
Canada’s Largest Classified Site Is Expanding Further into the Cryptoverse
Vancouver, CA: LeoList – the largest adult classified site in Canada, has announced an increase in its level of crypto-adoption: nearly 60% of all customer purchases since May 2019 were made in crypto.
Following difficulties with their payment processor, LeoList recently announced a change of ownership and a series of community-focused initiatives.
Since making this announcement, LeoList has re-established its credit card processor and enabled cryptocurrency and Flexepin payments on its platform. Users can now discreetly purchase anything from the site with the help of cryptocurrencies and Flexepin.
Leolist has gone one step further, cutting out the need for all users wanting to pay in crypto to have signed up to an external wallet. Working through the purchase of gift cards on Leolist’s site, you are provided with a QR code which can be used multiple times.
This QR code can be taken to a local Bitcoin ATM, top up as much as you wish and spend until your heart’s content. Leolist explains how to use cryptocurrencies on their website in detail here.
Advertisers are encouraged to add “BTC accepted”, or a similar phrase, to their adverts, allowing purchasers to have a clear view of which merchants take cryptocurrencies as payment.
LeoList is a classified advertisement service where advertisers across Canada promote their local businesses. According to Alexa.com, LeoList is one of the top 200 largest websites in Canada.
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