Introduction To Trading Stocks
When a company reaches a certain size, and therefore, level of appeal to investors, one of the ways they can raise capital for expansion is to do what’s known as an Initial Public Offering.
When a company does an IPO, it gets an independent valuation to determine the value of the company, and then it issues a number of shares. The initial value of each share is determined by dividing the value of the company by the number of outstanding shares. After shares are listed on an exchange, the market decides how much they are worth. For example, when Netflix did an IPO in 2002, the company’s shares were initially sold for $15 each and raised $82.5 million in the process. As of December 2020, Netflix shares are worth almost $500 each and more than 3 million shares are traded on the NASDAQ stock exchange each day.
* Risk Warning: Trading in forex and CFDs could lead to a loss of your invested capital.
The Benefits Of Trading Stocks as CFDs
Trading stocks using Contracts for Difference (CFDs) offers many benefits compared to purchasing shares from the stock market.
Use leverage to decrease capital requirements
When you trade stocks using CFDs, you’re able to apply leverage to your positions. Using leverage decreases how much of your account balance is used to open a position. When you purchase stocks, you need to cover the whole amount with your own funds.
Instant cash settlement when you close positions
If you’ve purchased some shares, and later decide to sell them, it can take as long as a few days for funds to clear and be available for making new trades or making a withdrawal. When you close a CFD, funds are available immediately.
A lower-cost way to speculate on the stock market
When you purchase stocks, some fees need to be paid to the exchange, clearinghouse, custodial and broker. Trading CFDs doesn’t involve physical ownership, and therefore, there are fewer parties that need to be paid, thus lowering transaction costs.
Go long or short and hedge your positions
CFDs allow you to open both long and short positions so you can speculate on prices rising or falling. Some traders who own stocks, sometimes use short positions to hedge against any potential downside volatility. You’re able to apply that same principle
Select Your Trading Account
Four ways to trade with FxMarkets Trade.
As a leading investment broker, FxMarkets Trade has developed competitive solutions to help clients trade and invest in the financial markets. You can choose how much you’re willing to allocate to
your investment strategy.
Standard Plan
Account opening balance from-
Self-trading account
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Access to world-famous trading platforms
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Micro lot trading
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1.4 Pip average floating spread
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STP & DMA order execution
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Multiple asset class coverage
Pro Plan
Account opening balance from-
Portfolio management service
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14-days concierge trading trial
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1.4 Pip average floating spread
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STP & DMA order execution
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Multiple asset class coverage
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Continuous support and assistance
Premium Plan
Account opening balance from-
Dedicated Account Manager
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1.2 Pip average floating spread
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STP & DMA order execution
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50% Stop Out
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Multiple asset class coverage
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Continuous support and assistance