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switch from CFD trading to share trading


hbrowna

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  • 3 weeks later...
13 hours ago, stormtrooper2 said:

Hello, friends, I'm new here, and I would like to know more about CFD trading, could anyone explain me what does it mean?

Hello, CFD's are Contracts for difference. You don't own any asset when trading CFD's but you only trade for the difference in price of the asset you are trading. A benefit to CFD's over holding an asset is that you can set the system to automatically sell your CFD when a profit level is reached or when a loss is reached. When you hold an asset like shares the value of your asset will increase or decline but you will need to place an instruction to sell to close it off. Another benefit of CFD's is that you don't need a buyer or seller to close your trade as apposed to holding a share you will need a buyer to take your shares but if they are declining in value that makes them of little interest for a buyer of your shares.

I would sum up the benefits of CFD's as follows.

1) You don't need a buyer or seller to close or sell your CFD trade.

2) You can sell your CFD anytime your like & set the system to automatically sell your CFD if you reach your profit or loss.  This means you don't need to be at the screen 24/7, although it is advisable to monitor your trades.

Please also read https://www.investopedia.com/terms/c/contractfordifferences.asp

Edited by dau710
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