Trading and Investing Strategies
For investors and traders looking for tips or techniques to underpin their own strategies, or those starting out looking for a solid base, we have a collection of pointers on everything from value investing to CFD trading to keep you on the right track.
Word of the Day
Contracts for Difference.
A form of derivative designed for traders who want extra leverage in share trading, although you can also trade commodities, indices and Forex through a CFD. Just like spread betting the investor places a deposit with their broker (typically 20% of the total purchase value) and that margin requirement goes up and down in line with the rise and fall in value of their position. Again, like spread betting, the investor is able to speculate with much more money than he actually has by borrowing from his broker. The geared nature of the trade means if an investment performs well, the returns will be higher through trading on margin. If they perform badly, the broker will require more margin payments which have to be paid in cash.