How to Trade CFD UK
Trade cfd uk is an increasingly popular way to speculate on the price of financial markets. The growth of online trading platforms, such as Plus500, has enabled retail traders to access a form of investing which was only available to professionals before. The term ‘cfd’ stands for ‘contract for difference’ and allows traders to speculate on the price movements of financial instruments such as shares, indices, commodities and currencies without taking ownership of them.
When a trade cfd uk is executed, the broker pays or receives the difference between the opening and closing prices of the underlying asset. Since no physical shares are exchanged, CFDs are exempt from stamp duty in the UK (*). Traders can profit whether the price of an instrument rises or falls as long as they predict correctly which direction the market is moving.
Traders can trade CFDs on a wide range of markets around the world, including the London Stock Exchange and FTSE 100 index. CFDs are also popular for hedging a share portfolio, especially during periods of market volatility.
Maximizing Opportunities: Trading CFDs in the UK
A key feature of a CFD is leverage, which multiplies the amount of money a trader puts up to open a position. This is one of the reasons why it’s essential to carefully consider a CFD provider and know your risk tolerance before you start trading. In addition, you should be aware that if you leave your trade open overnight then you may incur interest charges.