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Thanks to CFDs (Contract for Difference) you can trade in stocks with a limited investment.
Remember, a CFD of a stock mirrors the behavior of the underlying asset.
This gives you access to many stock exchanges around the world. You can trade with shares from companies based in France, United States, Australia, Japan, etc.
You can diversify your portfolio covering a wide variety of markets and you have a big amount of trading options. With CFDs, you can speculate on rising prices (long positions), but you can also speculate on falling prices (short positions).
When trading with physical stocks, you can only trade on rising market conditions and you don't have the advantage of leverage. CFD trading is way cheaper than doing it with the actual stocks.
The contract takes place between you and the broker outside a regular exchange (over the counter).
If you think that the price of Barclays is going to fall, then you can sell short the shares by clicking on the "Short" button.
You want to short 5000 shares at 165.50. The total exposure amounts to 8,275 pounds, but you only need a margin of 828 pounds to open this position.
You choose a stop-loss at 175: should Barclays rise above 175 you would make a loss of 612.59 euros. You can also choose a profit target, for example 140 pounds, which would mean a profit of 1,644.31 euros.
If you think that the price of Tesla is going up, then you can open a long position by clicking on the "Buy" button.
You want to buy 20 shares at 207.88. The total exposure amounts to 4,158 dollars, but you only need a margin of 416 dollars to open this position.
You choose a stoploss at 190: should Tesla fall below 190 you would make a loss of 320.34 euros. You can also choose a profit target, for example 250 dollars, which would mean a profit of 754.64 euros.
Compare the CFD platforms and try the free demos or open an account right away.
With an account, you can trade CFDs on shares, indices, commodities (oil, gold, silver, platinum, etc.) and on the Forex market (currencies).
With the free demo, you can practice with a fictitious capital so that you learn how to trade with CFDs and familiarize yourself with the platform from the brokers we selected.