Contracts for difference trading is a great way to trade silver online. They have greatly increased in popularity over the last decade, going from being a mainly institutional product to one traded heavily in retail markets and rapidly overtaking traditional trading as the most popular product choice for cost-efficient, flexible trading.
Silver CFD trading give you the ability to leverage your returns, making them a very effective instrument for trading. If you were to buy shares using a traditional broker, you would pay the full purchase price, but with CFDs you can spend less money but get the same exposure.
CFDs allow you to basically trade markets using from 1-10% margin. This is much like borrowing to trade and has the effect of magnifying potential profits and losses by a factor of 10 or more. So a 2% rise in share prices would translate to a 20% return on your investment.
Profit Regardless of Market Conditions
Another benefit of CFD trading online is the ability to profit from both up and down markets. You can hold long and short positions, so you can profit from a rising market or a falling market.
An additional advantage to silver CFD trading is that you can trade virtually any size position. Also there is not time limit on them. You don’t have to stress about missing an expiration date. The trading hours are also favorable, and CFD brokers offer guaranteed stop orders, which helps provide a reduction in risk overnight.
No Storage Difficulties
CFD trading online provide an excellent means of trading silver online without the hassle of storing the physical silver. Silver holds great interest for many traders because it differs from gold in some respects, such as functioning as an important industrial metal. Virtually all the gold ever mined is still in existence, whereas silver gets used up in industrial processes like photography and computer parts. Silver is also no longer kept as central bank reserves like gold.
You will learn that having the ability to trade silver online using CFDs is highly efficient- offering tremendous leverage for your money. You will get exposure to silver prices moves without putting down large amounts of money.
You might be able to trade the silver spot price or set a contract for a future silver price on a date you specify. Since you can make money whether silver goes up or down, you can also make profits during times of price consolidation.
It is important to realize that leverage works both ways. If the prices moves against your position, you could face a margin call to make up for any losses. So you must educate yourself on CFD trading so you can cut your losses short when it is clear that you are not in a winning position.