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CFDs

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CFDs

What are CFDs?

CFDs (Contracts for Difference) are a type of a tradable instrument that allows you to speculate on live market price movements without actually owning the underlying asset on which the contract is based. This unique method lets you create an agreement to exchange the difference between the opening price and the closing price of the traded asset. The difference multiplied by the position size determines the profit or loss.

The overall idea is quite simple:

Select an asset and choose to go long (BUY), if you think the market price will rise or go short (SELL), if you think the market price will fall. You can make profit in the event that the market moves in your favor, regardless if it’s an up trend or a down trend.

 

As a rule, a “BUY” price (ask) will always be slightly higher than a “SELL” price (bid) , while the actual market price of the tradable asset will be somewhere in the middle. The difference between the “BUY” and “SELL” prices is called “spread”.

 

CFDs are considered as a leveraged product (up to x200 leverage with the NovusCM  platform). What it means is that you are able to trade with only a small portion of the total value of your trade and still be able to maximize your returns.

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For example:

The price of silver is rising, but you think it will soon drop.

You open a SELL position on silver (5 ounces) at $660 an ounce (the bid price).

5 x $660 = $3,300

The contract is leveraged on a 1:50 ratio:

$3,300 : 50 = $66

This means you need at least $66 in your trading account (initial margin) in order to open this position.

Silver then drops $20 in value. You manually close the position and earn:

$20 x 5 (ounces) = $100

Your profit is $100

At no point did you actually buy any silver. You simply invested on the commodity’s market performance.

Advantages of CFD trading

CFD trading allows you to open several trades simultaneously while using quite a small amount of capital. This trading method carries no hidden fees or commissions to a third party.

Unlike other traditional forms of trading, there is no requirement to actually own the traded asset. This eliminates the need for any paperwork or contractual agreements with brokerage firms/banks.

You can simply register by providing your info, make a minimum deposit in a segregated trading account and start trading.

Leverage

Leverage gives you the ability to open a trading position while using only a fraction of its total value. Doing so, allows you to control larger trade sizes and to magnify your overall returns.

Diversification

As a CFD trader, you get access to all 3 major markets – stocks, commodities and indices. The opportunity to trade on such a wide variety of markets and assets provides you with the foundation to build a balanced and strong trading portfolio.

Risk management

You can set your exposure level by adjusting the “stop loss/take profit” parameters. This standard feature will automatically close any open positions if the price either drops or rises beyond a predetermined point, thus locking in profits and minimizing losses.

Profit opportunities

Trading in CFDs gives you the ability to produce profits, regardless of the asset’s market price direction. You can open a “SELL” position and profit as the asset drops in price.

Main Advantages:

Trade on both rising and falling markets

Efficiency of your capital

Up to X200 leverage

Risk management capabilities

24/5 availability

Transparent and secure

WHY TRADE CFDS WITH NovusCM ?

Opening an account with NovusCM  unlocks the entrance to a whole new and exciting trading experience like no other.

As one of the online trading industry pioneers, we are fully committed to providing you with unparalleled trading conditions. Take advantage of limitless access to our extensive collection of eBooks, video courses and live daily webinars, detailed financial updates, devoted account management team and 24/6 support.

The benefits of NovusCM :

State-of-the-art platform

Fixed spreads

Dedicated customer support

More than 1,000 top-class assets

Extensive educational center

Secure, transparent and regulated broker

Zero commissions, zero fees

1-on-1 personal trading sessions

Trade over 1,000 top assets

from 3 major markets

Stocks

Commodities

Indices

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Risk disclosure: FOREX trading involves significant risk. We strongly advise that you read our Terms & Conditions. Although the risk when trading FOREX is fixed for each individual trade, the trades are live and it is possible to lose your initial investment, particularly if a trader chooses to place his entire investment to a single live trade. It is highly recommended that traders choose a proper money management strategy which limits the total consecutive trades or total outstanding investment.

 

Disclaimer: NovusCM is an online trading platform provider. We are an industry leading FOREX brokers because we offer our investors the ability to trade underlying assets which include: Stocks, Commodities, Indices and Currency Pairs (FOREX) on an accurate and state of the art FOREX option trading platform. NovusCM advises its clients to read our terms and conditions carefully before opening positions on our platform. Digital option quotes displayed on the NovusCM platform are rates that the company is prepared to offer options at, and as a result may not necessarily correspond to the exact live market quotations. Trading FOREX contains risks which may result in partial or full loss of an investment. There are risks associated with utilizing an Internet-based trading system including, but not limited to, the failure of hardware, software, and Internet connection.

The Company is not responsible for communication failures or delays when trading via the Internet. Any opinions, news, research, analyses, or other information contained on this website are provided as general market commentary and do not constitute investment advice. The Company is not liable for any loss or damage, including and without limitation to, any loss of profit which may arise directly or indirectly from use of or reliance on such information.