CFDs: capitalise on a trade without upfront capital
CFDs are often one of the most important products in an active trader’s arsenal.
That’s because they give you the chance to place a sizeable trade without needing
to invest too much of your money. They also give you the potential to keep profiting
even when asset values fall.
The potential to profit whether the market rises or falls
When you take out a CFD you’re making a call that you think an asset’s value will go up or down. That asset could be a share, an index (such as the ASX or Dow Jones), the price of commodity or even a currency pair, say the Australian dollar compared to the US Dollar.
Unlike traditional investing, you never own the asset you’re making the call on.
Instead, as the name suggests, what you own is a contract for difference. You can keep
the contract open for as long as you want or close it whenever you’re ready.
You have the opportunity to ‘go long’, which means you think the value of the asset will
rise or to ‘go short’ which means you think it will fall. To some extent, how much you make
or lose depends on how much the value of the asset you’re trading goes up or down.
Harnessing the power
of other people’s money
CFDs use the power of leverage to amplify
any gains or losses. You only have to pay a small part of the purchased asset amount
and we essentially fill the difference.
That means if your call is right and the CFD goes the way you believed you have the potential to earn substantially more without tying up all of your capital. Conversely if the market moves the other way you’ll also lose more too.
To guard against this, many traders use techniques such as stop losses to put a limit on how much they stand lose by automatically closing the contract if the asset reaches a certain value.
This video shows you exactly how CFDs works.
Learn to trade CFDs
like the masters
When you trade CFDs with First Index you’re never alone. We do everything we can to make sure you execute effective CFDs trades from day one. Then we provide you with the education, insights and information to help you understand and master the techniques of the world’s best CFD traders.
You’ll learn how to interpret the data, recognise common trading patterns and develop a trading strategy that suits your style and your interests.
We also give you access to some of the world’s most comprehensive trading platforms so that you can trade the same global assets as the best traders around
Start your CFD
trading journey today
Getting started on your CFD trading journey is easy. Download the demo and start making your own trades without risking your money.
Alternatively, visit your local First Index branch or request a callback to find out
how you can get started trading today.
Start your CFD trading journey today
Getting started on your CFD trading journey is easy. Download the demo and start making your own trades without risking any of your money.
Alternatively, visit your local First Index branch or request a callback to find out how you can get started trading today.