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CFD Trading by IFC Markets

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CFD Trading by IFC Markets

Postby Akriti » Wed Oct 02, 2013 8:08 am

CFDs (Contracts For Difference) are traded in the most of the developed world. Because of the ability to trade CFDs on margin those are actually financial instruments that are generally traded by financial institutions to hedge against ownership in original assets, and by individuals and retail traders that speculate on its price direction.

CFD trading offers a number of advantages over trading the underlying asset directly. In addition to currencies, contracts for difference provide great opportunities for traders wishing to gain exposure on different markets.
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Re: CFD Trading by IFC Markets

Postby Akriti » Thu Oct 03, 2013 7:59 am

Index CFDs

Index CFDs and their dynamics are a precise and exact investor estimation of a particular national economy or a sector performance. Indices value by its nature is a composite indicator of systematic factors which influence markets as a whole.
There are various types of indices which may be price or capitalization-weighted, therefore differently considered when taking decisions upon their relevancy in different situations. The Dow Jones Industrial Average (DJIA) for example is price-based, meaning that individual stock prices are crucial in its calculation. On the other hand S&P 500 is capitalization-weighted, with an increased role of the company size.
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Re: CFD Trading by IFC Markets

Postby Akriti » Fri Oct 04, 2013 1:34 pm

Equity CFDs

Equities represent ownership rights in companies. Equity Contracts for Difference are instruments that allow investors take the advantage of speculating on price changes of certain stocks without getting directly involved in the ownership. Those who hold a position in Equity CFDs will get or will be charged dividend adjustments on defined dates, equal to the dividend announced by the board of directors.
The stock price is determined not only by global or structural factors, conditions in a certain business segment, but also by firm-specific features, its abilities to generate cash flows.
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Re: CFD Trading by IFC Markets

Postby Akriti » Mon Oct 07, 2013 11:01 am

Commodity CFDs

Commodity CFDs are considered an alternative type of derivatives which price and dynamics depend on the same factors and follow those, the real commodities, such as agricultural products, energy and other goods, do. Price determinants for commodities are mutual, as it may depend on supply stability, political and social factors, economic cycle stage which influences overall production process, weather and so on.
One of the main reasons for investing in commodities is their possible negative correlation with stocks and bonds and positive correlation with inflation, although commodity-linked derivatives may have higher volatility than equity. In periods of accelerated unexpected inflation commodities, especially energy-related, tend to grow more, offering a good hedge, while stocks and bonds are usually negatively correlated with unexpected inflation.
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