Getting started with CFDs trading might seem daunting at first, but it’s the quickest way to achieve a high return on your investment so long as you know how to minimise your risks. If you are new to CFDs trading or want to learn more about it, this article is for you. This article will discuss the basics of CFDs trading and how to get started in Singapore.
CFDs, or contracts for difference, are financial instruments that allow traders to bet on the movement of asset prices. CFDs are traded over the counter (OTC), meaning they are not listed on any exchanges. This makes them a more complex investment instrument than stocks or forex, and therefore require a bit more knowledge to trade safely.
When you trade CFDs, you are essentially betting on whether the price of an asset will rise or fall. In a typical CFD trade, you would first borrow some money from your broker to buy the asset and then sell it back at a higher price to recoup your initial capital plus a profit. Your return on investment is essentially the difference between the asset’s future and current prices.
CFDs have many advantages over other investments such as stocks and forex. Firstly, they do not require you to own any shares to make bets on their prices. This makes them suitable for traders who want exposure to an individual stock or …