Trading has never been easy, but still, many people are eager to bear the risks and delve into the attractive world of finance. However, if you’re smart enough, you’d never take a leap in the dark, but first consider all the available options very carefully.
Overthinking your trading prospects and all the available instruments that can help you increase your profits and minimise risks, you inevitably come to a dilemma: CFDs vs Shares. Here's a short guide that may help to choose which suits you best.
Another important trait of CFD trading is . Buying a share of XYZ, you pay its full cost. In the case of CFDs, you trade on , which means your broker leverages your capital to purchase a stock. So you have to pay just a particular percentage (or margin) of its full value.
Sounds too good to be true? Well, find out more to define, what works best for your portfolio and trading needs. Spot the major differences between CFDs or shares trading:
Now let’s take a closer look at the major advantages of share CFDs over share trading:
Leverage is probably the primary benefit of . For the same amount of money you deposit for shares, when trading CFDs you have the possibility to trade way more.
For example, having $20,000 on your account, you can trade 2-3 times more and take total positions equal to $40,000–$60,000, which is impossible with ordinary share trading.
Probably not. Well, trading on margin you often have to put only 5% of the total asset’s value. Sounds much better now, doesn’t it?