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How you can start trading contracts for difference (CFDs)

by , 17 January 2014

Contracts for difference (CFDs) give you the opportunity to make big gains on small rises and falls in a share price. If you fancy trading CFDs, then the first thing you need to do is find yourself someone to trade them through. Read on to find out how you can get started trading CFDs…

Contracts for difference (CFDs) are over the counter (OTC) derivatives, the team at FSP Invest in The Ultimate Guide for Trading Contracts for Difference explain…

They don’t trade through an exchange, but through a bank or company providing CFD trading.

CFDs are geared products. This means there are money multiplier effects at work. By trading a geared product, you have the chance to reap handsome rewards. But, you should bear in mind that the risks are higher too.

So if you fancy trying your hand at trading CFDs, where do you start?

Step one: Find a company to trade CFDs through

To begin trading CFDs, you first need to find yourself someone to trade CFDs through. Banks, dedicated trading companies and some stockbrokers offer CFDs trading.

Once you’ve found a company you’re happy with, ensure you read through and familiarise yourself with their CFD trading terms and conditions.

Then you need to complete the application form.

To open a CFD trading account, most companies will insist on a R20,000 minimum deposit. You may find some companies will accept less than this.

You’ll then need to forward your application to them with a copy of your ID and proof of your home address.

Most companies provide online CFD trading platforms for you to place your trades through. Of course, if you would rather phone through to the trading desk, you have the option.

Or, if you fancy just giving it a go for fun, try one of the simulated platforms available online.

So there you have it, how you can start trading CFDs.

How you can start trading contracts for difference (CFDs)
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