Free CFD Stock Trading – Trade Stocks Commission Free with TradeOr
Learn everything you need to know about free stock trading. When you trade CFDs, you are essentially speculating on price differences. Learn more.
When you trade CFDs, you are essentially speculating on price differences. CFD stands for ‘Contract for Difference’ and represents a contract between two parties: the trader and the broker. Each one promises to pay the other the difference in the price of an asset at opening and closing time.
Unlike other forms of online trading, such as buying and selling shares, when you invest in CFDs, you get easy access to the assets of your choice without the obligation to own them physically, thus making it easier to sell them later. This free CFD stock trading is popular because of its high leverage and volatility – but beware of the risks involved.
How Does a Contract for Difference Work?
CFD traders play the market by speculating on price differences. You open a CFD at one price and then you sell it at another. Your profit or loss will depend on how that asset has changed in value.
Suppose you choose a stock with an asking price of $20. Now you open a contract for difference to the value of 100 shares. If you were purchasing this stock, this would set you back $2000 (plus any commission or extra fees).
Your CFD broker only needs a 5% margin, however. So instead of $2000, now you only need $100 to begin trading.
Your bid pays off and the stock you chose goes up in value to $21. Only one dollar – that doesn’t seem like much, right? In fact, because your purchased 100 shares your holding is now valued at $2100 – from just $100.
Remember: the pendulum swings both ways. CFD stocks can generate tremendous rewards – but this type of trading is also high risk. High leverage increases your potential for profit, but it also exposes you to greater loss. The more you borrow from your broker, the bigger the hit if the markets move against you.
How to Start CFD Trading
If you are looking for free stock trading, CFDs are easy to open.
Choose the market you know best (cryptocurrency, commodities, forex). Do some research to see if you think a given asset will increase or decrease in value. This will help you decide when to buy (“go long”) or sell (“go short”).
Select the size of CFDs you wish to trade. Decide in advance the amount of capital you are willing to risk on the market. Find a platform where you can trade stocks commission free.
Add stops or limits to your orders. Stop losses and limit orders are risk management strategies that you establish in advance. Place a stop loss to automatically close a trade at a certain point in case price moves against you. A limit order will close your trade in positive territory. Use these to minimize your losses and lock in your profits.
Find a Free Stock Trading Platform
The right broker is essential in CFD trading. Choose a broker that charges low to zero commission and has no hidden costs. A good broker will arm you with the research and analysis tools to enter market trading with the proper knowledge to make informed decisions.
Take TradeOr, for example. This free stock trading platform lets you buy and sell CFDs with 0% commission and offers leverage of 100:1 or more. TradeOr offers 24/7 customer support, which is especially important if you are new to CFD trading. Trade CFDs on stocks, cryptocurrencies and more, and take advantage of the integrated tools that TradeOr has to offer. For example, traders with this platform can access ChartIQ which displays pre- and post-trade analytics.
TradeOr is also a broker that offers demo accounts. These practice accounts let you open an account with simulation money before you risk your own.
CFDS – Trade stocks commission free
Commission-free stock trading with CFDs may sound lucrative, but make sure you do your homework before making the leap with your capital. Tools like ChartIQ on the TradeOr platform are crucial for researching the markets and educating yourself on trading opportunities and expert insight.
The best traders will maximize the resources available to them and make decisions from the head – leave your emotions out of CFD trading. Find a trustworthy and free stock trading platform and arm yourself with all the tools on offer.