What you need to know about CFD trading

22 June 2017

The modern trading and investing world provides a huge number of ways to make a profit. These include daily currency trading, precious metals and commodities exchanges, as well as investing as a professional investment. One of the popular tools that allow you to buy shares of the world's largest companies is the so-called CFDsbased on price differences.

What you need to know about CFD trading

 

What are CFDs

CFD contracts belong to the professional investment instruments, they allow you to trade in stocks, metals, including in gold, by oilIt is similar to trading futures, but in this case you do not need to have several accounts on different exchanges. It is similar to trading futures, but there is no need to have several accounts on different exchanges. To trade CFDs, one brokerage account is sufficient.

These contracts work so that their value always remains inextricably linked to the value of the assets they represent. That is, if the shares these contracts represent jumped in value by 5%, then accordingly, the CFD will immediately grow by 5%. The important point: with CFDs you can open any length position.

 

History of CFD

CFDs began to be used in the nineties, they were invented by investors wishing to trade shares without having to deal with expensive and lengthy legal procedures. At the beginning, trade operations with CFD contracts were allowed only to the biggest brokers. They decided to offer their own clients these instruments, which allowed to avoid securities purchase tax, which is to be paid when purchasing shares in an ordinary way.

That is, when an investor buys a CFD contract, he is not actually buying a real stock. And therefore he is not legally obliged to pay tax for it. It is clear that this kind of investing quickly gained popularity among professional investors of all stripes and categories. In addition, this trading instrument has shown good profitability. CFDs allow you to sell assets, including indices, without coverage, paying only a small fraction of the real price of the asset, i.e. margin.

 

The main advantages of CFDs

  • They exempt the owner from paying large taxes.
  • For many instruments, CFD contracts allow you to use wide credit spreads.
  • Allow you to trade without coverage.
  • Most of the legal rules of stock turnover CFD contracts ignore.
  • They are professional investment tools.
  • They allow a beginner to quickly turn into a full-fledged high-level investor. For this purpose, all you need to do is register with a serious broker and buy CFDs on assets you like.

Large AMarkets broker offers to pay attention to the following promotions:

Paypal - the assets of this company have been growing steadily for quite a long time. Investors who bet on their growth, steadily receive a good profit. For the last quarter, the report of this company amazed even experienced experts, the results were simply brilliant.

Amazon shares have consistently shown one of the most impressive growth curves among online retailers. In the first three months of 2017, Amazon's assets surpassed their historical peak, jumping in value by a quarter.

Alibaba Group is the leading player on the Chinese market, which is engaged exclusively in online commerce. This holding company will definitely not give up its position, as it shows steady monthly growth, their old products are developing, and huge sums are being invested in new projects.

All of these stocks at AMarkets (go online) can realistically be purchased as a CFD without paying any taxes and avoiding other expenses.

 

In conclusion

CFDs offer the widest prospects for investors. They do not show any disadvantages. The procedure of contract purchase itself is much more simple than the purchase of real assets and full-fledged stocks. We recommend everyone to test the high profitability of this trading method and wish you success in investing!

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