What Are CFDs?
CFD is an abbreviation of the term contract for difference. A CFD is a simple financial instrument that allows you to make fast and flexible investments on the market performance of a variety of global assets – without ever purchasing any of the underlying assets.
CFD profits are calculated according to the difference in value between an asset price when you open a position and its price when you close the position. If you think an asset price is likely to rise you can open a BUY position. If you think that an asset price is likely to fall you can open a SELL position. CFD traders may potentially profit from any market movement.
A CFD Trade example:
The asset Oil is quoted at the following prices:
$46.13 (SELL) and $46.18 (BUY)
Your technical and fundamental analysis suggests that the price of Oil will rise.
You open a Buy position on 50 barrels (amount) at the offered price ($46.18).
You then continue to monitor the asset price in the CFD OPEN POSITIONS section of the Trade5000 platform.
The price of Oil increases as you predicted and reaches $46.23.
You believe that this will be around the limit of the price increase and close the position.
Your profit is calculated according to the following formula:
Close Price $46.23 – Open Price $46.18 = $0.05
$0.05 x 50 (amount) = $2.5 (profit).
If your prediction is wrong, you may lose part or all your invested capital. However, you can limit your losses by setting a Stop Loss order.
Try it Yourself:
Here’s how you can use the Trade5000 trading platform to open a trade:
If you correctly predict the performance of the asset you will profit according to the difference between your opening and closing price, multiplied by the number of units or lots of the asset that you traded on. If your investment fails you will lose all or part of your invested capital. You will not be exposed to any further liabilities or debt as Trade 5000 extends negative balance protection to all traders.
Assets that can be traded as CFDs at Trade 5000 include over 1,000 of the world’s best known forex, commodities, stocks and indices.
What are the benefits of CFDs?
Trade 5000’s CFDs allow you to make low cost investments on over 1,000 of the world’s top financial assets. Trading costs are set according to fixed spreads and there are no hidden fees, charges or commissions. Because you do not actually buy the underlying asset there are no administrative requirements or associated costs. CFD trading is a highly streamlined form of investing.
CFD trading is completely transparent the investment process is simple and logical. Investors are in control at all times and can implement full risk management. You can also boost each investment and gain higher market exposure by using up to x200 leverage. Even a modest investment in a CFD trade can potentially yield high profits.
- Fast, flexible and transparent
- Simple and easy to trade
- Applicable to over 1,000 global assets
- Fixed low cost spreads
- Instant leverage of up to x200
- Full risk management
What is Leverage?
Leverage is a financial tool that allows you to boost an investment up to x200 by trading with Trade 5000 money. For example: you invest $100 in a CFD trade and leverage your position by x200. Your actual market exposure will be $20,000. Leverage allows you to enter the markets with a small investment budget and potentially increase your profits with high volume trades.
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WHAT ARE FOREX?
Forex is an abbreviation of the term foreign exchange. Forex trading is simply the buying and selling of foreign currencies on the global markets. Forex markets are highly volatile and reach a daily volume of trillions of dollars. The forex markets produce almost non-stop trading opportunities and can offer experienced traders high profits in a very short time frame.
Any financial or geopolitical event can cause major fluctuations on the forex markets in just seconds. Most Trade 5000 investors consider forex trading to be an important component of their personal portfolios.
You can trade some of the world’s best-known currencies such as the US dollar, British pound and euro as CFDs (contracts for difference) at Trade 5000. When you trade forex as CFDs you are investing on each currency’s market performance and do not actually buy any foreign currencies.
WHAT ARE SPEED TRADING?
Speed Trading are one of the most simple and convenient financial instruments available today. They allow you to open fast, custom built trades on over 1,000 global assets using a variety of investment parameters. A single Speed Trading trade can earn predetermined returns (profits) worth up to 400% of your initial investment.
For example: a One Touch trade on Gold offers an ROI (return on investment) of 87%. You choose to invest $100 and your trade is successful. The sum of $187 will be immediately credited to your trading account balance. This is your original investment of $100 plus your profit of $87.
Trade 5000’s Speed Trading platform puts you firmly in control of your own investments and gives you instant access to four of the world’s largest financial markets. When you trade Speed Trading you are investing on the predicted market performance of each underlying asset and there is no need to buy the asset itself. The platform is connected to the world’s financial markets and is updated in real time, allowing professional level trading and investment.