About CFD Trading

You can trade on margin with CFD trading, and speculate on the price falling or rising (going long or short). This means that you speculate on the difference in price of a financial market (when the contract opens and closes). The profit/loss result is dependant on whether you are correct in your speculation.

With CFD trading, you buy or sell a number of units of a financial instrument - depending on which direction you believe the price will move. For each point the price of the instrument moves in your favour. For every point the price moves against you, you will make a loss, and visa versa.

You can use a CFD to gain exposure to a much larger position than you can with a standard trade. This is possible through leverage, with leverage you are able to agree to exchange the difference in price of a larger asset without committing to the full cost of the position.

It’s important to remember that when trading CFDs with GKFX, your losses may exceed deposits, and it is recommended that you emplore a high level of risk management when trading with leveraged products.

CFDs are tax efficient in the UK and they can be used to hedge an existing portfolio. GKFX offers CFD trading on a range of global markets, including currency pairs, commodities., cryptocurrencies and indices.

For more information on CFD Trading, and our Top Ten Mistakes made in CFD Trading, download this Ebook below:

Example:

If you hold £10,000 of Apple shares and you believe they’re about to sell-off, you can try to protect your share portfolio by short-selling £10,000 of Apple CFDs.

If the Apple share prices fall by 10%, the lost value of your share portfolio would be offset by a gain in your short sell CFD trade. This means you able to protect yourself without liquidating your stock holdings. Which could incur costs and a possible tax liability.

Is CFD trading right for you?

CFD trading is best suited to investors that want to try and create a better return for their money. However, it comes with considerate risks to your capital, and is therefore not suitable for everyone. It’s advised to try CFD trading on a demo account, where you trade with virtual money.