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Share Contracts For Difference - Advantages

Market Moves Staff in CFDs 29 Mar 2010
IG Markets gives you access to equity CFDs

Share CFDs through IG Markets are ideal for taking a view on individual equities.

CFDs (Contracts For Difference) have grown rapidly into a major force in share trading

Here are some of the benefits of trading CFDs

  1. Gearing
    CFD traders can gain exposure to a large amount of stock with only a fraction of the notional value held as deposit. This can be as low as 5%.

  2. Go long or short
    The vast majority of Share CFDs can be sold just as easily as they can be bought. Going short with a traditional broker is often inconvenient and expensive.

  3. Guaranteed Stops
    For an additional premium, a CFD trader can place a stop that will be guaranteed, no matter how volatile or illiquid the underlying market. Non-guaranteed stops and limits are also available free of charge.

  4. Instant online dealing
    Firms like IGMarkets offer trading platforms that provide real-time trading at the guaranteed market price. For example: L2 Dealer gives you access to the order book of the stock exchange.

  5. Range of markets
    Share CFDs are available on the equities of over a dozen countries. Currently, the list includes: UK and US (Nasdaq 100 and New York Stock Exchange), a variety of European exchanges including Deutsche Borse (Germany), Euronext (France, Holland), Italy, Switzerland and Greece, Several Asian exchanges such as Hong Kong and Singapore, as well as the Australian Stock Exchange

Key facts you should bear in mind:

  1. Your do not own any underlying share
    Instead, you are striking an agreement to exchange the difference in its value between the time the contract is opened and the time it is closed. The deal is struck at the current traded value of the share, giving the whole transaction transparency

  2. You do not have to put up the full value of the shares being traded, instead submitting a small percentage as initial deposit 
    The interest on the full value of the stock is charged (or credited, for short positions) to cover financing costs. Dividends are credited to long positions and taken off short positions.

Find out more at IGmarkets

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Share Contracts For Difference - Advantages

CFDs (Contracts For Difference) have grown rapidly into a major force in share trading

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