Trading stocks is a popular way to invest in the stock market. Unfortunately, trading stocks can be difficult for some people. Trading stocks requires an upfront investment on the part of the investor that they may not have or want to jeopardize by trading more than their budget allows them.
What are CFDs?
A CFD and a spread bet and financial instrument that enables you to trade in the direction that the price of an asset moves. They allow traders to open positions where they predict whether the value of an asset will rise or fall without requiring any buying power, unlike other forms of trading such as investing in shares which requires capital upfront before you can start selling.
Nine reasons to trade in CFDs instead of stocks
Here are our top 9 reasons why you should trade in CFDs instead of stocks.
No need for significant capital investments
It only takes $10 to get started trading. That is less than the price of a cup of coffee! With such low investment, you could afford to trade every day if you wanted, instead of having to wait until your stock allocation has grown enough to trade again.
Margin: speculate on an asset’s value without owning it
Using leverage allows traders to speculate on an asset’s value without actually owning the asset itself. The margin required is usually much smaller than other forms of trading. It gives users access to more opportunities and means they can enter markets that were previously too expensive to trade.
Diverse asset selection
The system provides access to different markets and allows users to speculate on stocks, currencies, commodities and indices. CFDs give traders a wide variety of opportunities as they allow you to speculate on a diverse range of assets, including stocks, currencies, commodities and even indices such as the Dow Jones or FTSE 100. This simply means that regardless of your expertise, you can find something that is right for you.
Trade from anywhere
CFDs are available 24 hours a day, seven days a week which gives traders an unprecedented level of flexibility regarding trading hours. With no closing time like the London Stock Exchange, CFD traders are not stopping buying or selling stock when they want.
Free demo account
Try out your strategies with a free demo account before putting any money on the table. You can start practising straight away just by registering with a CFD broker who offers demo accounts to traders.
Non-stop trading
You are not tied into specific timeframes meaning there are no timeslots for trading which mean traders can trade at their convenience. This gives users endless opportunities to make the most of every market movement throughout the day, night or weekend!
Low spreads and commissions compared to other markets.
CFDs have low spreads and commissions when it comes to fees, meaning that the minimum amount of investment required is still available even once commission and fees have been accounted for. It makes CFDs an excellent option for those looking to speculate on the movement of an asset without sacrificing any potential profit. We also offer spreads as low as 0.5 points, meaning you can trade even more efficiently.
No stamp duty or capital gains tax
Unlike other forms of investment such as buying shares, there are no transaction costs associated with trading, and there is no capital gains tax to pay either. All the money you make from your trades goes straight into your pocket and does not go towards paying taxes.
Trade indices
You can trade indices such as the Dow Jones or FTSE 100, which opens up a range of opportunities thanks to its diversity and high liquidity, meaning you can trade whenever the price reaches a good point.
Finally
Trading in CFDs is becoming popular amongst those looking for profitable opportunities with minimal risks involved. Traders do not need any prior experience buying and selling shares and can use CFDs with any starting budget.
