A contract for difference is an agreement made by the broker and the trader to exchange the difference between the share price at opening and the share price at closing of trade, multiplied by the number of shares involved in the agreement.
There are two main strategies in CFD trading. You can go long if you believe that share prices of are going to rise; take out a CFD then keep your position open until share prices increase significantly. You can also go short when you expect share prices to fall; take out a CFD to gain control of assets through a marginal deposit, sell them at current prices then buy them back at lower prices. In either scenario, you will pocket the difference between the opening and closing of trade prices.
You should give CFD trading a try. Make sure to use an online stock market trading broker like One Financial which can offer you contracts for difference on a great variety of commodities. They have one of the best stock trading programs in the web so you should find online stock trading easy.
Saturday, February 9, 2008
CFD Trading
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