How CFD Stock Trading Works?
CFDs allow traders to buy and sell shares easily, even when the market is falling. The stock market puts certain limitations on traders, which is where the stockbrokers come into play.
Instead of buying the shares themselves, there’s a contract where the broker agrees to settle the difference in value between the entry and exit price of the shares. This allows more flexibility to the traders in the stock market.
It also provides leveraged stock trading up to 20% margin, allowing more profitable opportunities. The spread costs can be calculated by the traders by tracking the real-time spreads and pip costs. There are no hidden costs.
Calculate Trading P/L
Sell price – Buy price x Pip value x No. of Contracts (Lot size) = Total P/L
Calculate Trade Margin
Stock price x contract size (lot size) x 20%= Margin required
Benefits of Stock CFDs
Enhance Stock Trading Experience
Trade Shares Online
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Trading via CFDs is on margins. Hence, traders get the freedom and flexibility to go short when there is a downward trend. They can generate profits from even small market movements.
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