Want to make money on various market assets without buying them? AvaTrade is a convenient and profitable trading tool that allows you to trade with CFD. Find out more about it from the article below.
Easy trading with CFDs
CFD (contract for the difference) – contracts on the difference of prices of a basic asset. This is a derivative instrument that makes it possible for an investor to benefit from fluctuations in the price of a market asset without actually having to buy it.
In essence, CFD is a transaction between a market maker and an investor. The investor buys from the market maker, not the main asset itself, but only a CFD of its value.
If there is a positive difference between the opening price of a transaction and the price of closing, then the broker pays it to the trader. If the difference in price is negative, then this amount is deducted from the investor’s account in favor of the broker.
Advantages of CFDs include:
- You can equally easily make money on different assets – stocks, precious metals, indices, and even digital currencies
- Controlled risks. The term of the transaction is unlimited, the contract can be closed at any moment when it is advantageous for you
- The amount of profit is not set, and with sudden price movements, you can get a big profit
- You can earn both with growth and when prices fall
Before starting to trade, choose the CFD broker that will help you conclude your transactions. More about this read here.