Traditional trading has a number of disadvantages for the traders. With no leverage facility and paying a lot of additional fees like stamp duty and others, your good amount of money is tied up unnecessarily. CFD trading is a newer way of financial trading at XFR Financial Ltd in which you can speculate on stocks and other financial instruments in a more cost effective manner.
You could never try thousands of financial instruments from one single platform but CFD trading allows you to do so. There is no cost incurred on you for owning the assets as you do not need to own any asset in trading CFDs. CFDs are just contract for difference agreements with a provider to exchange the difference of prices between exit and entry prices of underlying assets. The best advantage is that you can take the advantage of both rising and falling of prices of underlying assets. Since you do not have ownership of assets, buying and selling are much easier here. Moreover you can take the advantage of leveraging to gain higher profits with minimum investments. Let us go over the advantages of trading CFDs in detail here.
There is no actual exchange of anything when you trade CFDs and therefore the cost of physical ownership and transfer is avoided in trading with CFDs. There are number of costs involved in ownership of assets like stamp duty, account management fees and others. You can move in and out of the trades more effectively because of the cost effectiveness here. You can be more tax efficient in CFD trading than other ways of financial trading. You can also offset your capital gain tax liabilities with losses you incur in trading CFD.
Hedging your portfolio at XFR Financial Ltd
CFD trade is an effective way for hedging your portfolio at XFR Financial Ltd. For example if you feel that the stock market needs a sell-off, and then you can protect your portfolio by short selling CFDs. Thus you can save yourself without facing the inconvenience and expense of liquidating your asset holdings.
Trade more with less deposit – Use Leverage in CFD trading
Leverage allows you to trade big positions with minimum deposits. You can take the advantage of huge leverage ratio as much as 100:1 with CFD trading. This means that for every dollar you invest, you will get 100 dollars of market exposure with CFDs. This means that you can gain good amount of profit with CFDs in a shorter period. If you feel that you can earn good profits with XFR Financial Ltdby trading higher amounts of money, you can do this with as minimum as 1 percent as margin with CFD trading.
But one important thing to be noted about leveraging is that it can lead to deeper losses which you could not get if you had not applied leverages. Both types of possibilities are there, it can work for you or work against you. So be cautious while using leverages and try your best to minimize the risk of losses.
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