Buying Bitcoins can be a very frustrating process as there are not too many reputable Bitcoin Exchanges and funding your account takes time and is limited to wire transfers in most cases. Since Bitcoin transactions are irreversible, the exchanges will not accept deposits using Credit Cards, PayPal or any other reversible ways of sending money in order to avoid the risks of chargebacks.

The good news is there is another way to profit from the Bitcoin frenzy. It’s more accessible, requires smaller investments and can generate higher profits. Now you can trade Bitcoins through a professional CFD broker.

What is a CFD Broker?

CFD stands for Contract For Difference. When buying a CFD on a specific asset through a broker you are required to have enough funds in your account to cover for the potential difference in the asset price in case the asset you purchase will lose value. The broker will offer you leverage and allow you to buy contracts that are higher in size compared to your total account value. Contract For Difference can also be ‘shorted’ or sold. This means that you can sell an asset without even owning it if you think the value will decrease in time.

One of the high profile brokers is now offering CFD’s on Bitcoins. The broker is Ava Trade .

How to trade Bitcoins with Ava Trade?

Trading Bitcoins with Ava Trade is very easy. After opening an account and making your first deposit you are ready to trade Bitcoins. At Ava Trade you can deposit as low as $100 and they accept a wide range of funding methods including credit cards, debit cards, PayPal, Moneybookers (Skrill), Neteller, Webmoney and more.

Ava Trade offers a leverage of 5:1 for Bitcoins. since the digital currency is considered a very volatile asset. The leverage of 5:1 works in the following way: if the Bitcoin’s market price is $1,000 and you have $1,000 in your Ava Trade account, you are able to buy or sell a contract of maximum 5 Bitcoins (the contract is worth $5,000). This way you have a purchasing power of five times your bankroll. In a regular Bitcoin Exchange you are able to buy only one Bitcoin with $1,000, but at Ava Trade you can buy a contract for 5 Bitcoins with the same amount.

There are both advantages and disadvantages of leveraged trading. If you correctly predict the direction of the price you will make much higher profits when using leverage. The downside is that the risk is also higher. If the price moves against you, your loss is higher, and you can even lose your entire investment and be forced to close your position by a margin call. The broker reserves the right to automatically sell your contract if the loss equals the amount of money you have in your account. We recommend the use of leverage only for people who are very well aware of how these instruments work and have experience in forex or CFD trading.

If you have difficulties in understanding how leverage works or if you prefer to take smaller risks, you can still buy contracts equal in value to your bankroll. This way you don’t risk a forced sell if the value crushes and you’re able to keep your Bitcoins as long as you want.

Considering the initial example of $1,000 for one Bitcoin and the account size of $1,000 you can simply buy a contract for only one Bitcoin. This way you cannot risk to have your position closed in case the Bitcoin falls in value for a while.

Selling Bitcoins

If you think the Bitcoin is going to lose value because it has already risen too much in a very short time, you can sell Bitcoins without even owning them. You can simply sell the CFD contract and you will make profits from the decrease in value. This is called ‘short selling’ in financial jargon and is often used by investment funds when the markets are falling.

Bitcoin Trading FAQ

What is the minimum deposit required to purchase Bitcoins with Ava Trade?

The minimum deposit at Ava Trade is $100

Can I buy Bitcoins with PayPal, Skrill, Neteller, Webmoney or a Credit Card?

You can fund your account using any of the above mentioned methods. However please notice that you are buying contracts on Bitcoins, not the actual Bitcoins in your wallet.

Should I use leverage when trading Bitcoins?

This is up to you. If you are using leverage than you are taking higher risks. Since the Bitcoin is very volatile, you can still make high profits without using leverage.

Trading Bitcoins with Binary Options

Another great way of trading Bitcoins is through a binary options broker that offers Bitcoin trading. With this method you can obtain fixed returns from predicting the direction where the value of the Bitcoin is heading. The payout of Bitcoin binary options is usually around 70%, so you can make a very high profit in just one day.

In the above image you can see a sample Bitcoin Option from the broker Trade Rush that will offer a payout of $170 for a $100 investment if the prediction is correct. Trading Bitcoins using binary options is available at the following brokers: Boss Capital and Red Wood Options

The best part is that both brokers also accept US clients so this method of trading the Bitcoin is available for people in USA as well.

Bitcoin options are usually available between 8:00 and 20:00 GMT time and can be found in the Currencies section of the platforms. You may be unable to find them at different hours but you can check back agai during the trading schedule.

More information about trading Bitcoins using binary options can be found on the following article: Bitcoin Trading with Binary Options Brokers

Warning Notice: Trading with derivative instruments is very risky and can result in the loss of your entire capital. Never trade with money you cannot afford to lose.