CFD Trading: A Quick Guide To Trading Indices With CFDs

SINGAPORE, March 9, 2012 /PRNewswire/ --

CFD trading in indices is one of the most popular choices for traders, in particular, indices such as the UK 100 and Wall Street.

The major indices that are the most popular with CFD clients include the aforementioned UK 100 and Wall Street, plus the Germany 30 and France 40. These indices are all available with some of the tightest fixed spreads through City Index Asia.

Whilst major indices such as these are available from as tight a spread as 1 point, City Index Asia also offer tight spreads on the Hong Kong 40, Singapore STI and Japan 225 indices.

Most indices are quoted around-the-clock, allowing you to trade 24-hours a day even if the underlying market is closed.

CFD Trading: What is it?

Similar to traditional trading, CFD prices are quoted as a 'Bid' (the price at which you sell at) and 'Offer' (the price at which you buy at).

Like traditional trading, the net result of a CFD trade is the difference between the opening and closing value of a contract.

Additionally, CFD trading enables you to go short, allowing you to profit from a falling market, as well as in a rising market, by going long.

If you think a market will rise, you will go long and 'buy' and your profits will rise in line with any increase on that price. Alternatively, if you think it will fall, you will go short and 'sell' and your profits will rise in line with any fall in price.

In addition, traders can potentially enhance their return on investment using a CFD as it is a leveraged product, thus allowing you to maximise your market exposure for only a small fraction of the investment you would typically need to trade the underlying asset directly.

However, it is imperative that traders remember that higher leverage can result in losses that could exceed their initial deposit.

Summary

CFD trading with City Index Asia offers traders a range of benefits. Remember, trading CFDs on margin carries a high level of risk, which may not be suitable for some investors. Consider your investment objectives, level of experience and other relevant circumstances carefully.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

City Index is a leading global provider of margined foreign exchange, CFD trading and in the UK, spread betting. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. To learn more visit: http://www.cityindex.com.sg/