Introduction to CFDs (BEGINNER) | FP Markets скачать в хорошем качестве

Introduction to CFDs (BEGINNER) | FP Markets

Contract for differences, or CFDs, are over-the-counter leveraged trading products that mirror the price of underlying markets. CFDs represent a contract between buyers and sellers to exchange the difference between the opening and closing price. CFDs are there to speculate on the future direction of a market’s price movements, without taking ownership of the underlying asset. Most CFD trades have no fixed expiration date and are settled in cash. CFD hedging is also a popular strategy to offset potential losses. The CFD market delivers access to the global marketplace, offering traders a broad range of tradeable asset classes, such as: Foreign exchange — think popular currency pairs like EUR/USD and AUD/USD. Commodities—Gold and silver, for example. Individual Equities—the likes of Apple and Google. Equity Indices—the S&P 500 in the US and the FTSE 100 in London. Cryptocurrencies—which at current prices need no introduction. Popular cryptos are the likes of Bitcoin and Ripple. To better understand the underlying dynamics of CFD trading, let’s chalk up a basic conventional share dealing and an equivalent share CFD trade example. Traditional share dealing involves taking ownership of the underlying shares in a company. With stock CFDs, traders bypass ownership. To own shares outright, the trader must pay the full purchase price upfront. As an example, assume Facebook (FB) trades at $300.00 a share (this can be any stock, such as Apple [AAPL] or Microsoft [MSFT]). To physically own ten shares, the interested party must pay $3,000 (300 multiplied by 10). This is the full purchase price or notional value. For a leveraged CFD share trade, to invest in the same market—Facebook at $300.00—the trader sidesteps the full purchase cost and trades on what is known as margin. This may be 20 percent of the notional value, for example, so $600.00. Generally, an individual CFD is equivalent to one share. Some advantages of CFDs are: Traders and investors have access to leverage—great for those working with smaller account sizes. The ability to trade both rising and falling markets. No physical delivery. CFD traders, therefore, do not have to concern themselves with things like storage and insurance costs. Ok so to access leverage, CFD traders must open a margin account and deposit sufficient equity to cover margin requirements. Aaron Hill was introduced to financial trading, specifically foreign exchange, over a decade ago. Since then, Aaron caught the trading bug and has amassed substantial knowledge, obtaining CMT (Chartered Market Technician) levels 1 & 2. He has since been awarded the CFTe (Certified Financial Technician) and member of the CMT Association! For FP Markets Webinars: https://www.fpmarkets.com/past-webinars/ #FPMarkets #education #knowledge #trading #investment #academy Facebook:   / firstprudentialmarkets   Twitter:   / fp_markets   LinkedIn:   / admin   Telegram: https://t.me/fpmarketsroom