Want to start trading? Than start to trade CFD Leverage. With a CFD (Contract for Difference) you trade with a small investment, but with a significant amount in share, raw materials or indices. Trading CFDs can be done on many broker platforms, like for example IC Markets, Plus500, Fortrade of IG.
An example of CFD Leverage
You bought 10 google shares at Google shares at 500.00 dollars each. Normally you would pay for this: 10 x 500.00 = 5000 dollars. The initial margin for 10 Google shares on the IC Markets platform is 10%: 500 dollars. With an investment of 500 dollars, you will take a position of 10 Google shares, while you still enjoying the total increase of the 10 shares. If Google increases to 450 dollars and you will sell these CFD’s, you make a 50 X 10 = 500 dollar profit. Your investment of 500 dollars has become 1000 dollars. So, this means that you receive the difference between the opening and closing value of a particular trade, without investing the whole amount yourself.
Why CFD Leverage?
- No commissions: brokers making money on the spreads between the bid and the ask
- You choose when you want to stop and you decide the risk you want to take
- You will never lose more than the deposit on your trading account
- You make money by speculating on rising and falling markets
- Large profits with a small investment, thanks to the leverage effect