Trading CFDs (Contracts for Difference) on Indices allow you to speculate on the rising or falling of an Index price.
Trade on the movement of major stock markets around the world, without commission.
Index CFDs offer access to a range of markets that allow you to diversify your trading strategies and portfolios.
Trading CFDs on Indices have multiple benefits. You can place a buy or sell order on any Indices available, and since the trader never owns the asset, the cost of trading it is very low.
Benefits of Trading CFDs
- No commission
- No dealing desk
- You can place a trade in any direction (sell or buy)
- Allows you to buy or sell the instrument without actually owning the underlying asset.
- Leverage trading
Example
You only pay or get paid the difference in the entry price and the exit price, for example: you buy (long) one contract of Dow Jones at an entry price of $27,000 USD and exit (close your trade) at $27,400 USD this means you make a profit of $400 USD per contract. If the price goes down, then you will have to pay the difference, for example, if you buy a contract of Dow Jones at $27,000 and exit at $26,800 then you would have to pay $200 USD per contract (also referred to as a loss) to the other party (usually a clearing house or an exchange). To clarify, if you Buy a contract (long) you want the price to go up to make a profit. On the other hand, when you sell a contract (short) you are expecting the price to drop to make a profit.
Learn even more about CFD trading in our article here.
