A globally recognized financial derivative dealer based in the UK provides its investors the privilege of dealing through the online mode, either in CFDs or spread betting or foreign exchange globally. The headquarter is in London and 13 other offices situated internationally. Their ultimate goal is to help people experience trading in a new and innovative way through the online platform and make things easier for their clients to make investment in the financial markets. Through technological investment in the field of online trading they have been able to take trading experience to a whole new level with Next Generation being their most advanced platform till date. Their basic aim is to serve their clients dedicatedly and address all their queries and grievances through expert panels. They also provide the option of sending feedback from their clients so that they could improve their quality of service. The access to a large number of underlying assets and instruments throughout the world is what differentiates this market from other competitors. Its numerous platform trading tools such as pattern recognition, client sentiment charts and multiple layouts helps to trade in any type of securities be it CFD trading or spread betting. Moreover, it provides detailed information on the pros and cons of dealing in online securities and makes their client accustomed to the market of online trading.
Trading in CFDs instead of stock
A CFD or contract for difference is actually an agreement entered into between two parties where they agree to exchange the variation in the opening and closing price of the contract. This can be used to speculate and trade on the price difference of numerous financial markets without making actual investment on individual instruments or underlying assets. The major difference between stock trading and CFD trading is that you do not have to own the underlying securities to trade in them which indicate a lot less investment than actual stock trading. The CMC markets promote this kind of trading due to the several advantages it possesses. Some of the benefits worth mentioning are:
Unlike traditional trading methods CFD trading provides high leverage, the standard leverage starting from 2% margin requirement and fluctuating depending on the nature of the underlying asset. This indicates a much less capital investment for the trader while providing much higher returns. Though the order types are similar to that of traditional broking some brokers provide guaranteed stops for either a negligible or no fees. Many brokers do not charge any commission for entry or exit from a trade, instead they recover their commission from the spread they charge the investor both in case of an ask price or a bid price. Unlike certain markets which place a limit on the amount of day trade for a particular account or the minimum capital requirement to day trade, the CFD market have no such restrictions. Accounts can be opened for a minimum amount of $1,000 and traders can day trade on their wish.
Through CFD brokers investors can have access to stocks from all over the world provided the same is available from the platform of the broker. Moreover, it does not have any rules for short selling and also absence of any shorting or borrowing cost. Trading in CFD gives you the option to have access to various instruments such as index, treasury, stock, sector CFD and commodity and currency CFD.
Cost of trading in CFD
The costs involved for CFD trading in CMC markets are different from that of stock trading and much lesser too. The costs involved are:
Holding cost – Your account may be subject to a charge at the end of a trading day called holding cost which can either be positive or negative which is dependent upon the holding rate applicable and the direction of your position in the market.
Spread – Like all other trading markets a spread is need to be paid while trading in CFD which is the difference between the buying and the selling rate. The expectation of price fluctuation of the underlying asset decides the amount of spread. The higher the spread more is the possibility of price fluctuation and vice-versa.
Fees for market data – A certain amount for activating market data subscription needs to be paid to view or trade in CFDs.
Commission – A separate commission charge is required to be paid for trading in share CFDs. This charge varies from state to state as also the minimum amount of commission to be paid. The commission amount is also dependent on the broker through whom you are trading.