Why trade CFDs?
So why should a trader trade with CFDs?
Flexible Trade Direction
This is one of the most attractive features of CFDs because it means you can trade both long (you expect the price to rise) and short (you expect prices to fall). This allows you greater flexibility with your trading strategies as you can now benefit or profit from a falling market.
Trade on Margin
You can access a wide range of global markets and you can trade a range of financial products allowing you to spread your risk by having diversifying your exposure.
Easy to Understand and Trade
Everything that you know about shares and share trading can easily be applied to trade CFDs because the price of CFDs moves as the actual share price moves. Unlike some other derivative, most CFDs don’t have expiry dates and are less complicated to trade than options.
The principles of hedging are fairly simple, it is like taking out insurance to minimise your risk. Very simply, some CFDs can be use to provide a ‘hedge’ against the value of your portfolio going down.