LONDON, July 25, 2012 /PRNewswire/ --
On Tuesday, 24 July, ratings agency Moody's lowered its outlook for three of the eurozone's AAA-rated countries as they warned of an increased risk in Greece leaving the eurozone.
In the following CFD trading guide, we look at the latest news out of the eurozone and how you could take a position on the future price movement of European indices with a City Index CFD trading account.
Moody's Lowers Ratings of AAA-Rated Countries
The cut which affected Germany, the Netherlands and Luxembourg - taking them from stable to negative - followed a manic day in the markets on Monday, 23 July; with investors selling as fears grew that Spain might be forced to seek a sovereign bailout.
In the Moody's explanation of why it revised the outlook on the three AAA-rated countries, it said that none deserved a 'stable' rating what with the growing risk of Greece exiting the euro, as this would trigger a 'chain of financial-sector shocks'.
Further instability comes from Italy and Spain and the potential burden of any bailouts for the two countries affecting Germany, the Netherlands and Luxembourg is significant- regardless of whether Greece exits the euro or not.
Trade CFDs on European Indices
Unlike traditional trading, you can take a position on the future price movements of over 10,000 financial instruments with a CFD trading account from City Index.
For only a small initial deposit - a fraction of the total value of the underlying instrument - you can trade on major European indices such as the FTSE 100, CAC 40 and DAX 30.
Looking closely at the German 30 through the CFD trading platform you can trade on the future price movement of the index- choosing to go long and buy, or short and sell.
Following the downgrade, investors may look to go short and sell the index with the expectations of it falling.
In the event the Germany 30 falls, they will profit in line. However, in the event prices move against their position and rise, they can potentially incur losses greater than their initial deposit.
CFD trading offers investors the potential to profit in a falling market and hedge their portfolio. Find out more and start trading across thousands of global markets today with CFD trading provider City Index.
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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.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.
CFD trading is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
CFD trading is exempt from UK stamp duty. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.
SOURCE City Index