Margin Trading
CFDs are leveraged
products, so you only need to deposit a percentage of your total position. So, a smaller
amount gives you high market exposure. With a smaller cost per trade, you can aim for
greater returns. However, the potential for losses are equally magnified, due to the higher
exposure.
Potential to Trade in Rising and Falling
Markets
CFD trading is based on the price movement of an asset and doesn’t
require physical ownership of the asset. So, investors can go short in falling market
conditions. Physical shares, on the other hand, can be shorted only through a traditional
stockbroker, who would charge additional fees on top of brokerage fees.