CFDs give you flexible access to a world of trading opportunities.
Discover the nuts and bolts of how it all works.
Develop your shares, indices and FX trading ideas with the help of our experts' predictions for 2015.
Contracts for difference (CFDs) allow you to trade on the live market price movement of shares, indices, currencies and commodities without owning the underlying instrument.
Because they are traded on margin, CFDs enable you to gain a large exposure in the market for a relatively small initial investment amount (a deposit), normally between 1% and 10%, giving you a more efficient and effective way to invest across a range of global markets.
Plus, you can potentially profit from both rising and falling markets.
For example, if you think the Australia 200 Index will fall in the coming days because some major mining firms are expected to report weak earnings, you can 'go short' or sell.
If the index moves in the way you predicted, you can profit from every point the Australia 200 falls.
And, because CFDs are a leveraged product, you can place a trade by depositing just a fraction of the full value of your position.
Remember, however, that while leveraged trading allows you to gain significant market exposure, which means your potential profits will be magnified, your losses could be magnified in the same way. If a market moves against your prediction, you may incur losses that exceed your deposit.
Find out how to help manage your risk here.
You can also use CFDs as a hedging tool to help offset any losses incurred in your physical portfolio of shares.
At City Index, we offer low commissions, tight spreads and low margins on thousands of financial markets, including indices, shares, currencies, commodities and more.
1With leverage, your losses are magnified in exactly the same way as your gains if the market moves against you and can result in losses exceeding your initial outlay. Please ensure you fully understand the risks involved.
City Index is a trading name of GAIN Capital Australia Pty Ltd.
The material provided herein is general in nature and does not take into account your objectives, financial situation or needs. While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments. GAIN Capital recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com.au, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. GAIN Capital Australia Pty Ltd (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.