SINGAPORE, June 8, 2012 /PRNewswire/ --

Contracts for Difference or CFDs are a kind of derivative which enables you to trade on the change in value of an asset without actually owning it. In other words, you can enter into an agreement with two parties to trade between the opening and closing price.

With CFD trading, you can go short in a falling market or go long in a rising market. By predicting a rise in the market, you can 'buy' or go long. Alternatively, by predicting a fall in the market, you can 'sell' or go short. Both allowing you to profit.

Traders potentially could increase their ROI by using a CFD, as it is a leveraged product. This means you can maximise your market exposure for just a small fraction of investment typically needed to trade the underlying asset directly.

Take for example, if you want to 'buy' $20,000 worth of Genting Singapore, you can do this with an initial deposit through your City Index CFD trading account of $2,000 - margin of 10% on Genting Singapore shares.

Traders must be aware and remember that a higher leverage can result in losses that can exceed their initial deposits.

City Index offers a great range of markets to CFD trade on. One in particular is indices such as the UK 100 and Wall Street. A lot of indices are quoted all day, which allows you to trade 24-hours a day even if the underlying market is closed.

So, by CFD trading with City Index Asia, traders are open to a range of benefits. Keep in mind that trading CFDs on margin can carry high levels of risk, which may not be suitable for some investors. Consider your personal investment goals, what your level of experience is and other circumstances that are relevant in your situation.

About City Index:

Individual traders constantly discover the benefits of derivatives. Many of them discover these 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/

SOURCE City Index Asia