At MintCFD, CFD Trading is easier to learn, effortless to execute and empowering to trade.
What is CFD Trading?
CFD stands for Contract for Differences, is an agreement between a seller and a buyer, with a provison that the seller or the buyer would pay the price difference between the current value of an asset at the time of opening a contract and the future value of an asset at the time of closing the contract.
In simple words, this contract has a condition that the seller or the buyer would pay the price difference between the following:
- The present value of an asset at the time of opening a contract
- The future value of an asset at the time of closing the contract.
Reasoning on whether the Asset Value will fall or rise is what a CFD trader does.
How is money made through CFD Trading?
Profit in CFD is made through rightly reasoning on the price movements. There is no ownership involved in this form of trading. The prime focus is only on the price change during the trade exit and entry.
CFD Trading in India is now even better with opportunities available on MintCFD app and MintCFD website.
How CFD Trading works?
There are two modes of CFD Trading. The expert traders term them as positions: Long Position and Short Position.
- Long Position in CFD trading: It’s when you believe that the value of an asset would go up and you get into a contract, stating that the price would go up. If the price goes up at the end of the contract, the broker will pay you the difference.
- Short Position in CFD Trading: It’s when you reason that the value of an asset would come down and you get into a contract, stating that the price would come down. If the price comes down at the end of the contract, you will end up facing a loss and you will pay the difference to the broker.
Let’s assume: You are getting a CFD of Tesla Shares.
- In Long position, if the value of Tesla Shares is $5 at the time of opening the contract and if its value is $8 at the time of closing the contract, then your profit is $3. The broker will pay you the profit.
- In short position, if the value of Tesla Shares is $5 at the time of opening the contract and if its value is $8 at the time of closing the contract, then your loss is $3. You will pay the broker.
It’s simple and straightforward.
You don’t get to use, utilize, exploit or consume Tesla Shares, but you get to speculate only on its price movement. Not just shares, you can engage in stocks CFD, commodities CFD, indices CFD, CFD forex and other financial instruments.
Key Advantages of CFD Trading:
- Allows you to speculate on the price movement in both directions: down or up. You can choose as per your wish, understanding, choice, instinct and research. If the market is going down, you can choose short position and vice-versa.
- Acts as a great hedging tool. If you already own Tesla shares through a traditional trading platform and if it is going on a downward movement and if you are expecting a loss, then at that time, a Short position in CFD can help out and mitigate the loss. You will gain whatever you lose on the other side.
- Boasts its nature of easy execution and easier understanding.
- Offers its beneficial disposition to both experienced traders and beginners in trading.
- Provides an opportunity to trade even when the market is crashing, as you can go short.
- Demands a very minimum deposit requirement.
- Exposes a wide variety of assets, instead of getting clogged by monotonous trading resources.
- Evades a fixed expiry.
- Sanctions you a higher Leverage. Only around 5% of the cost is required as your capital and the rest can be utilized from Leverage. However, the loss or profit is calculated for the entire amount. Less capital, more profit. Your CFD transactions get better with leverage.
How to start CFD Trading?
After creating your CFD Trading Account, you must go through the following process for any and all trades you involve yourself in.
- Pick a Product – Product here means the instrument you are going to invest in. It can be in the form of any of the financial instruments such as currency pairs, commodities, forex and indices.
- Pick a Position – Depending on the market trends, you may pick to go Long or to go Short. Your position determines your profit.
- Pick a Price – Most of the time, it is your understanding, along with instinct that drives your decisions. However, choosing how much to invest needs critical analysis of the price movement and trends.
- Pick a Partner – It should be your first Pick. Choose the right platform that allows you to explore your trading skills, with minimal process and procedures, without maximal risks and restrictions. MintCFD is one such platform that brings you closer to your trading dreams.
What makes MintCFD the best trading platform for CFD Trading?
- Zero Brokerage fees
- No hidden charges
- 100x Leverage
- Simpler to understand
- Safer to execute
- Tight spreads
You can start CFD Trading, by opening your free account in just 4 minutes. You are just one click away from joining the best CFD Trading site.