An individual has higher leverage with cfd than with traditional trading. The leverage trading regulates in the market. It can be as low as 2% of the maintenance margin. The lower requirement of margin means less outlying of capital for the investors and traders. The less capital margin will give greater potential returns, and increasing leverage can even magnify the losses.
Benefits of CFD
- Access to the global market- The brokers offer their products in the major markets of the world. This product allows them to have access around the clock. The investors trade on a range of over 4000 markets worldwide.
- No need to borrow stock- Many markets have rules to prohibit the shorting and require the traders to buy the instruments before short selling. They have different requirements of margin for long and short positions. The trading instruments of the contract of difference are short trading at any time without buying costs because the traders do not own the asset.
- No fees for professional execution- The broker offers order types like limit, contingent, and stop as traditional brokers. Few brokers guarantee stops and will charge for the service.
The brokers offer index, stock, currency, treasury, commodity, and sector contracts of difference. This broker allows the speculators to trade in diverse financial vehicles.