CFD stands for ‘Contract for Difference’, which is an arrangement made between two parties, the buyer and the seller, over the price movement of a specific financial product. Essentially, the seller has to pay the buyer the difference between the present value of an asset and its value at the time the contract was made.
By trading Share CFDs, you gain access to some shares of your favourite companies traded on the stock market. As an investor, you’re trading on the price movements of shares in a corporation that is listed in the equity market.
By trading Share CFDs, you gain access to the stock market of some of your favourite companies. As an investor, you’re trading on the price movements on shares of a corporation that is trading in the equity market.
FXTM offers nearly 180 major company shares, including but not limited to:
Our Share CFDs are traded with instant execution, guaranteeing you efficiency when setting stop loss and take profit orders as you enter the market.
As with all other CFDs, trading Share CFDs is a much cheaper option than buying and trading the underlying stock itself. The benefit is that it offers the trader the same, and sometimes even greater, profit opportunities as if they had bought the stock. This is a double-edged sword however, as the trader can suffer the same amount of losses depending on the price movement of the stock in question.
With CFDs in general, identical margin requirements apply regardless of whether you’re going short or long. What’s more, leverage is higher with CFDs than it is with traditional trading, and the margin requirement for Share CFDs often starts from just 3%. Even still, traders need to apply proper risk management into their strategies because using leverage and margin can potentially amplify losses as well as profits.