CFD TRADING
Learn about CFDs in our Introduction to CFDs.
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Traders that wish to invest in the price movements of instruments can buy a Contract for Difference, rather than purchasing physical assets.
- You can also take advantage of fluctuations in the underlying instrument or security, which is popular form of investing for short-term investors or traders that seek to profit from market moves.
- Vgg Markets enables traders to take advantage of leverage and to spread capital across a range of different instruments rather than tie up capital in a single investment (Note:This is an approach that can increase risk).
- To mitigate the risk, traders can use Vgg's risk management tool to hedge exposure
COMMODITIES TRADING
CFD, short for Contract for Difference, is a derivative financial instrument that enables investors to gain exposure to financial markets without physical ownership of the underlying asset. It is an agreement between the trader and the provider to exchange the difference in value between the opening and the closing level of a particular contract.
It has no expiry date, meaning that the investor (in this case you) decides when to close down their position, at which point the difference in value would be exchanged (i.e. profits paid or losses deducted).
CFDs are usually leveraged so only a fraction of the total value of investment needs to be deposited in your account in order to trade and the remaining amount is financed by the provider, in this case, by VGG. Vgg Markets permits you to trade with less leverage through a variable margin offering.
KEY FEATURES FOR TRADING CFDS
CFDS ON INDICES
- Trading indices with Vgg Markets enables you to trade and invest in the US, UK, European, Asian and Australian market including: 100GBP, 200AUD, D30EUR, NASUSD, SPXUSD, U30USD etc.
- Indices are adjusted for dividends depending on the cash component of the dividend on individual shares within the index. VggMarkets clients trading CFDs on Indices benefit from these dividends.
- With CFDs, the same margin requirements apply regardless of whether you’re selling or buying.
- Since you can take both short and long positions with CFDs, a bearish market holds the same risks for incurring losses, but it also offers potential opportunities for profit.
- Trading CFDs on Indices is far less costly than trading the underlying index, but offers the potential to deliver similar gains and losses.
- While many traders find CFDs appealing, always remember that they carry the same risk as trading any leveraged asset.
CFDS ON COMMODITIES
- You can trade the following commodities on Vgg Markets platform: XAU/USD, USO/USD, UKO/USD, XAG/USD etc.
- Whether you go short or go long, the same rules and margin requirements apply when trading CFDs.
- The margin requirements for CFDs are lower than they are for the underlying asset. Click here for our contract specification details on CFDs.
- Since you can take both short and long positions with CFDs, a falling market retains the same risks when it comes to incurring losses, but it can also offer potential profit-taking opportunities.
- While the benefits of trading CFD may be clear, remember that all leveraged assets are subject to high risks and may not suit some people. You could lose more than you invest and can risk making further payments.