Tuesday, December 15, 2009

Why Trade CFDs Online?

CFDs have become an increasingly popular alternative instrument for speculating on the movements of indices or commodities. CFDs are a growing asset
class because they offer:





The ability to trade on the movement of financial markets around the globe

Trade global commodities like silver and gold easily or speculate on whole indices all from one FX Solutions account. This 24-hour a day instrument gives retail traders access to markets that would be otherwise unavailable to them. (Review our CFD markets page for more information.)

Limit your trading risk

Because CFDs trade on margin investors need a fraction of the total value of a position to trade. With the Global Trading System's (GTS) auto close-out feature your risk exposure is limited to the amount of capital invested. In the event the market turns and the position approaches a negative value, GTS' auto close-out will automatically close out the positions protecting you from achieving a negative balance.

The ability to long, short or hedge easily

Profit from a falling market as well as a rising market. With CFD trades, you can go long or short. If you believe that an asset’s price will fall, you can use CFDs to short (sell) it today, with the expectation that you can buy it back at a later date at a cheaper price. In some cases, the price of your trade may move against you, which will result in a loss.

Leverage

Leverage allows qualified traders to take a larger position than they would if they funded their trade in full. FX Solutions offers leverage up to 200:1 on a variety of CFDs †.

Low transaction costs

Trade commission-free. FX Solutions is compensated through a portion of the fixed bid/ask spread.

Flexible contract size

Trade the number of units that you choose. Unlike in other markets, CFD investors are not locked into predetermined contract sizes. Also, CFDs with FX Solutions allow investors to trade fractional units of the underlying indices or commodities.

Source - http://www.fxsol.co.uk/cfd/why-trade-cfds.asp

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