Your browser does not support JavaScript!

Welcome to our Blog!

The best front row seat for fantastic
Elliott Wave CFD trading tips & education

5 ways CFDs Can Work Effectively for Your Trading Portfolio

5 ways CFDs Can Work Effectively for Your Trading Portfolio

How-CFDs-Can-work-fo...

5 ways CFDs Can Work Effectively for Your Trading Portfolio

Understand how CFDs can work for you.

01  THIS WOULD HAVE TO BE LEVERAGE

When you buy shares/stocks/equities, you pay the full price. You own them right? Then you wait for the price to rise, get dividends, and one day, when the price is right you sell them and your wealth increases. With CFDs you can do all that, except you don't have to pay so much to buy the stock.

For example:

If I want to buy an ASX200 stock I will only pay 5-10% of the share price. So if the stock price is $50, and I want to invest $200, I can get 100 CFDs for the price of 4 shares!  When the price of the stock increases, I can sell my CFDs and get the same profit the seller of shares gets. The big bonus is that I'll be getting the profit x100, not x4!


02  PROFITING AS THE MARKET RISES AND FALLS

CFDs can be used to short the market. This is fantastic if I hold stocks in a long term portfolio and I want to hedge against drops in their value. I buy the stock as a CFD to go short (drop in value). I'm betting against others who think the value is going to rise.

For example, I hold Bank of Queensland shares and I think they are in for a drop. I only want to risk $250 of my account ($30K/<1%) and that will buy me x1666 BOQ CFDs (they have a margin of 10%) at the price of $10.99. I sell short at 10.00 and make $1649. So, minus the initial $250 and after commissions of approx. $18, I’m well ahead with a $250 investment rather that buying shares at over $18,000!


03  ACCESS MASSIVELY LIQUID GLOBAL MARKETS

When I sign up for a CFD account with one of the well regarded CFD platforms I have access to an amazing array of stocks. I love trading big US stocks like Apple, Amazon, Google and Facebook. Huge makers with lots of activity. Always an opportunity to trade up and down.


04  I STILL GET DIVIDENDS

You might think that as a derivative/ CFD holding is not going to get you the side benefits that shares do. You are partly right… when I trade a stock short, I don’t get any, in fact I pay it out, but if I’m going short it actually works in my favour. If I have a CFD like BHP which I am trading long, I do get the full dividend for only paying out 10% of the share price. Note, I must buy at least a day before the dividends are released.


05 TRADINGLOUNGE IS HERE TO HELP

If the thought of trading derivatives like CFDs makes you a little nervous, don’t worry we are here to help. TradingLounge means you are not alone. You are not just a number in a big platform. We love Mentoring, education and generally being here for you.

So, what are you waiting for?

 


 

WITH A TRIAL MEMBERSHIP
YOU CAN HAVE A NO-OBLIGATION LOOK
INTO THE WORLD OF CFD TRADING
AND HOW YOU CAN BENEFI
T

$1 for a 20 Day Trial Membership to learn more!


Related

Tags

Education, STOCKS: USA

Categories

CFD Trading Education, CFD Education

Share

You need to login in order to comment

 Get Your Trial
20 Days for $1

 

WHAT YOUR TRIAL INCLUDES

At TradingLounge we offer our Members access to all areas!

  • Our coverage means you get maximum flexibility in your trading options
  • Trade Signals for Share + CFD trading
  • Analysis + Trades updates every day
  • Elliott Wave specialists
  • Discretionary strategies to take away

 

Our huge range of markets include charts + videos for:

  • Indices – US, Asian + Euro
  • Commodities – Gold, Oil
  • Forex daily – Primary pairs + US Dollar Index
  • Buy/Sell Trade Signals – ASX, US + UK stocks – selection, set, come back next day


Also included so your trading can really improve:

  • TradeCheck to check your own analysis or trades
  • CFD Analytics Software to calculate, manage and track your trading
  • Trading Education plus One-2-One Class
  • Phone + Email support
AddThis Sharing
AddThis Sharing
Topics
Archive
What our clients say