Before starting speaking about CFD stock trading, first of all, let us define what CFD is and what stock is in financial world. Contract for Difference is a contract between two parties, generally known as buyer and seller. If the price of the contract is positive, that is to say if the price rises, the seller pays to the buyer. If the price of the contract is negative, if the price falls, the buyer pays to the seller. Stocks are widely traded on exchanges all over the world and they indicate ownership rights in a corporation. CFD stock trading allows traders to speculate on price changes of various stocks without physically possessing that stock.

The Advantages of CFD Stock Trading

The increasing popularity of CFD trading is due to the fact that the following assets are less volatile, than currencies, but the made profit is rather significant. CFD market allows accessing to diverse modern financial instruments. CFD Stock trading has a number of advantages:

• Margin trading. The use of leverage gives investors an opportunity to deal with larger amounts, which increases the chance of the profit. Leverage is offered for a specific amount- margin. The percent of the provided leverage may differ depending on the brokerage company and the stock type. The possibility to trade with high volumes, investing only small amount, is very attractive. However, it should not be forgotten, that the use of leverage is risky as well, because the trader deals with the sum, which he actually does not have.
• Opportunity to trade on both increasing (bull) and decreasing (bear) markets. In the CFD market each investor can make a profit in spite of the direction of the market. As it is the market price of the underlying asset that is traded on the CFD market, and not the asset itself, the profit is made from the price fluctuations regardless of the market direction.
• Absence of additional fees. Taking into consideration the fact that during CFD deals the price is traded, not the underlying asset itself, commissions, possible taxes and duties related to the purchase and possession of assets by ownership rights, are not charged.
• The opportunity of entering international markets. Another advantage of CFD trading is the opportunity of getting access to any market and trade American, Asian, European and other stocks.

Try CFD Stock Trading with IFC Markets

IFC Markets is a leading broker in the international financial markets, which offers large number of Stock CFDs of world’s largest companies. Stock CFDs offered by IFC Markets give traders the opportunity of making profit both on increase or decrease of the stock rates, as well as on stock dividends. Despite the fact that you do not own stocks, dividends are credited to your trading account in form of special dividend amendments, if you have open buy positions before the session for a particular day (ex-dividend data) by the stock’s issuer. Another advantage of CFD Stock trading is the leverage of 1:40 and the low commission for opening a position — only 0.1% of the position volume and no commission for closing a position.

IFC Markets is a leading innovative financial company, offering private and corporate investors wide set of trading and analytical tools. The company provides its clients with Forex and CFD trading through its own-generated trading platform NetTradeX, which is available on PC, iOS, Android and Windows Mobile. The company also offers MetaTrader 4 platform available on PC, Mac OS, iOS, Android, Windows Mobile and Smartphone. You may compare the advantages of both platforms.