By trading contracts for difference (CFDs), you have the potential to make a lot more money than if you invested in shares directly.
It all comes down to trading on margin.
So how does this work?
Read on to find out…
Where gearing and the margin come in when you trade CFDs
The money multiplier effect at work when you trade CFDs is gearing. You gain gearing when trading CFDs by ... ››› more
As with other derivative products, when you trade contracts for difference (CFDs) you can go long or you can go short.
So what does this actually mean? And what difference does it make when you trade CFDs?
Read on to find out…
A quick introduction to CFDs
When you trade CFDs, you enter an arrangement between two parties to exchange the difference between the closing price of the c... ››› more
Contracts for difference (CFDs) aren't just for trading shares. You can also use them to trade indices (or indexes).
This means if you think a particular sector is going to move up or down, you can trade it.
Let's take a closer look at how this works…
How to trade indices with CFDs
To trade indices using CFDs, you can trade exchange traded funds (ETFs). This means if you think a p... ››› more
When you trade contracts for difference (CFDs), there's a daily financing charge involved.
If you put on a long trade, you pay a daily financing charge. If you put on a short trade, you receive a daily financing charge.
But, if you don't hold your position overnight, you don't have to worry about the daily financing charge.
So how does it work when you trade?
Read on to find out…
... ››› more
If you're looking for a way to trade stocks and indexes, contracts for difference (CFDs) could be the trading tool for you.
So what are CFDs? What are the key features of CFDs? And why should you think about trading CFDs?
Read on to find out…
What are CFDs?
CFDs are over the counter (OTC) derivatives. This means you don’t trade them through a stock exchange, but through a compan... ››› more
If you want to trade derivatives, you'll come across a number of different instruments you can use. One of these instruments is contracts for difference (CFDs).
So why should you consider trading CFDs instead of just buying shares?
Read on to find out…
Why you should trade CFDs
#1: CFDs are geared instruments
As CFDs are geared instruments, you can trade what you want and onl... ››› more
If you're looking for a better way to generate short-term profits than investing in shares, perhaps it's time to consider trading contracts for difference (CFDs).
Trading CFDs has a number of advantages over investing in shares. Trading CFDs does comes with higher risks than investing in shares, but the rewards are potentially far greater.
So why should you consider dumping your shares and t... ››› more
If you've decided to trade contracts for difference (CFDs), before you can start trading, you need to open up a trading account.
So what do you need to do?
Read on to find out…
You need to pick a CFD broker
The first step to opening a CFD trading account is to find a broker.
If you already have a stockbroking account, check if your broker offers CFD trading accounts. If they do... ››› more
When you opt to trade contracts for difference (CFDs), there's a daily funding charge. This differs depending on whether you go long (buy) or you go short (sell) CFDs.
So how does the funding actually work in practise?
Let's take a closer look…
How funding works with a long CFD trade
When you go long (buy), you have to pay a daily funding charge when you trade CFDs.
Let’s hav... ››› more
Trading contracts for difference (CFDs) can be a great way to make money no matter what the market is doing.
But to be a successful and profitable CFD trader requires discipline. You can't approach CFD trading as you would investing in shares. As CFDs are geared products, the risks are greater.
So what steps can you take to become a better CFD trader?
Read on to find out…
Four way... ››› more
One of the advantages of trading contracts for difference (CFDs) is that as well as using them to trade individual stocks, you can use them to trade indices.
And you're not just limited to South African indices, you can also trade indices of select offshore markets.
So how does trading indices using CFDs work?
Let's take a closer look…
How to trade indices using ETFs
When you o... ››› more
If you focus your analysis on one particular sector, this is a good trading strategy for you to consider.
Pairs trading involves going long on one stock and short on another stock. And contracts for difference (CFDs) are great for the job.
So how does pairs trading work? And why it is a trading strategy worth considering?
Let's take a closer look…
What is pairs trading?
Pairs t... ››› more
If you decide to trade contracts for difference (CFDs), before you even think about putting your first trade on, you need to work out how you're going to manage your funds.
You'll never be 100% accurate with your trades, so it's vital you have a strategy in place to limit your losses.
As CFDs are geared financial products, with the potential to make healthy profits from small moves in share ... ››› more
Contracts for difference (CFDs) offer you one way to trade the stock market.
Many traders like CFDs as the pricing is very transparent with daily funding costs, they can easily hedge their current portfolio and they don't have an expiry date.
If you want to trade CFDs, are you ready?
CFDs, along with other trading products, are geared products. This comes with high risk, so it's crucial y... ››› more
If you invest in a share, if its price rises R5, you're R5 better off.
Yet thanks to gearing when you trade contracts for difference (CFDs), the same share price move could leave you R50 better off.
So how does gearing work when you trade CFDs?
Let's take a closer look…
What is gearing?
CFDs, like other derivative products, are geared. In other words, there are money multiplie... ››› more
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