CFD Trading
The CFD (Contracts for Difference) market is the smart investor’s way to trade shares without having to pay the full price of owning the stock. And you can also profit by selling in anticipation of an expected fall in value, something you can’t do easily with normal share trading.
The key benefits of trading CFDs with City Index compared with conventional forms of trading are:
- Fully interactive online dealing
- Go short as well as long
- Competitive financing rates
- Competitive commission rates
- Initial margin requirements from 2%
- Instant execution
- Improved liquidity
- Small dealing sizes
We quote CFDs on thousands of UK, US and European equities, as well as major stock indices, using real prices. It’s an exceptional way to profit from short term price movements. Click here for further information on the range of instruments we offer.
CFD trading carries above average risk, please remember that it is possible to quickly lose more money than your initial deposit and you may be required to make further deposits at short notice. CFD trading is not for everyone so please ensure you understand the risks.
What is a CFD?
A contract for difference allows an investor to benefit from the change in value of an instrument without needing to own the underlying security. While relatively new to Australia, City Index’s platform is an evolution of proven award winning software that thousands of investors have used for many years in the UK. Indeed CFDs are now estimated to account for over 40% of the daily volume of the London Stock Exchange.
Originally developed as a trading vehicle for large institutional traders, CFDs are now accessible to the individual investor. City Index’s platform offers you the calibre of trading tools that brokers have enjoyed for decades.
The place for CFDs
Speculating
CFDs are a more cost efficient way to trade shares, commodities, indices and currencies than through traditional brokers. They are ideally placed for investors who choose to implement short term trading strategies with the aim of profiting from fluctuations in the physical market.
Hedging
Many investors find share CFDs an ideal risk management tool for their physical share holdings. For instance, an investor can hedge an exposure in a particular share being held long term for a dividend stream against an anticipated fall in price by taking a short CFD position.
An alternative to margin loans
Investors can gain exposure to the value of large positions without having to fund a physical holding through leverage.
Why you wouldn’t trade CFDs
Any investment in CFDs is speculative. An investor should consider the appropriateness of investing in a high risk category. For added protection in the possibility of the market trading against your position, City Index can offer you the security of a guaranteed stop loss. For those with little experience trading. City Index can help with its trading academy and has a suite of tools to help improve the skills of private investors. The performance of an investment in CFDs will be largely determined by the decisions of the investor.
Control your risk, Maximise your profits
As a City Index client you can maintain a level of control over the level of risk that suits you. Whether selling or buying, when opening a trade over the internet or via the telephone, you can indicate a level at which you would like your closing order to be triggered. By placing a “stop loss” you can be shielded from adverse movements in the market. A “guaranteed stop loss”, involving a small charge, gives complete protection even when the value of a market leaps or falls erratically from one level to another (“gapping through”) especially in the time between the closing price on one day and the opening price on the next.