A CFD is an agreement to exchange the price difference of a share between the time a contract is opened and the time it is closed. They are traded on leverage to give you more trading power, flexibility and opportunities. CFD trading is similar to the normal share trading in two aspects. You deal at the actual price of the share, and pay a commission which is calculated as a percentage of the value of the transaction. When you open a position, however, you do not have to pay for the value of the shares. Instead you put up a deposit, known as margins. Margins start at 5% for Australian shares. This means that you can trade up to 20 times your initial capital outlay and make more efficient use of your trading dollars.

With CFDs, you can buy or sell at the quoted price so that you can profit from rising or falling markets. CFDs, therefore, give you more trading flexibility and more opportunities. They can be used to trade in an extremely wide range of financial products on a variety of global markets. For example, if you have an interest in shares, the level of Dow Jones, the price of oil and the exchange rate of the Australian dollar against the Euro, you can deal on all these markets with one CFD provider like the IG Markets Limited.

The IG Markets is committed to helping you become a successful trader whether you are a beginner or already trading in CFDs resources and Forex Trading. They have all the tools that you need to help you on your way to trading success.

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