Wednesday 17 October 2018

Why Traders Go For CFD Trading?

Nowadays, Contracts for Difference (CFD) trading is gaining immense popularity in the financial market. CFD trading refers to the trade of contracts. The traders buy contracts and gain through the difference in the cost of assets from the time the contract was purchased to the time it is closed. Through CFD trading, one can undermine the fluctuating prices of shares, indices, currencies, etc in the market.

There are various reasons that traders are getting attracted towards CFD. These are as follows:

Trading in the wide market
For trading in different market forms, traders go for different platforms but in the case of CSD, they can easily trade around 15000 markets with just one click. Moreover, trading outside the trading hours is also available under CSD. However, under such conditions, the opening price of the market may vary from the out-of-hours price.


Going short
CFD tends to be the most flexible form of trading in the market. Since CFD forms to be an agreement between the opening and the closing price, a trader can easily trade on the buying and the selling price of the stock along with the markets going up or down in price.

No Stamp Duty to be paid with CFDs
Traders trading through CFD do not need to pay any stamp duty because they do not own any asset and moreover, they can easily recover their losses through capital gains tax profits. This fact attracts more and more traders towards CFDs for trading.

Leverage
A trader can extend his capital through CFD by just depositing a fraction of trade’s value to open a position, which is called margin. However, any profit or loss bore by the trader depends upon his position’s size rather than the amount he has deposited.


CFD is similar to the underlying market
CFD trading is similar to trading the underlying market. If you have already traded in the non-leveraged market, then CFDs can be more familiar to you than to those who traded in the leveraged market.

Hindering Share’s Portfolio
Let’s say a trader bought shares of a bank and want to keep it for long period of time. Then, he realizes that the banking sector will enter a downturn. In such a situation, the trader may face losses and to recover this loss, he opens a short position.If his estimation is correct and the shares get a dropped value, then he will earn a profit in his CFD position and if the share’s value increase, the holder’s CFD’s position may fall and he may incur losses.

So, these were few features of CFD trade. If you are looking for a secure CFD trading platform, then go for Pruton Group’s PT Pruton Mega Berjanka.  Under the trading name of Pruton Capital, the Group provides its traders with a platform to trade CFD. The platform offers the best trading environment that allows minimum risk and offers high-level protection in investment.