What are CFDs?
A CFD is a contract for difference. It is a form of financial instrument that allows you to invest on a global asset without
purchasing the asset itself. CFDs are a simple, flexible and transparent form of online trade. When you open a CFD trade on an asset, your goal is to profit from changes to its market price. Your profits are calculated as the difference between the asset price when you open a position, and the asset’s price when you close the position.
Arotrade traders can boost their investments on individual assets by up to x200 using leverage.
The use of leverage allows you to increase your market exposure and potentially earn higher profits with a smaller initial investment. One of the big attractions of CFDs is their simplicity.
You can open a CFD trade on an underlying asset either as a Buy or a Sell position.
An Example of a CFD Trade
Arotrade offers 3 main classes of assets as CFDs: Stocks, Commodities and Indices. The basic trading principles are the same for all assets.
You buy USD 250 with Euros. After a week, you exchange the dollars back to euros, making a profit of $75.
When you first bought the $250 a week ago, the USD market price was 0.9 EUR. Now, the USD market price is 1.2 EUR. This 0.3 price movement earned you $75.
You profited by following the basic market principle of buying the dollars at a low rate and selling them back at a higher rate. If you had leveraged your initial investment your profits would have increased in direct proportion to the leverage that you used.
$250 x 200 leverage = $50,000.
$50,000 x 0.3 price movement = $15,000
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Why Trade CFDs
Arotrade offers modern traders a low-cost investing environment, where fixed spreads have replaced old fashioned fees, commissions and hidden charges. When you trade CFDs, you can follow every stage of your investment and see all your potential profits, losses and expenses at a single glance. Arotrade operates a slimmed down online brokerage with few of the costs that were associated with the old style investment houses and stockbrokers. These savings are passed on to our traders.
Traders at Arotrade have instant access to up to x200 leverage. The only condition is that you maintain a sufficient margin reserve in your trading account to cover your leveraged trades. Leverage allows you to multiply the volume of any trade and potentially increase your profits by the same proportion.
When you trade at Arotrade you can open leveraged trades on nearly 1,000 financial assets such as forex, stocks, commodities and indices.
Benefits of CFDs
CFDs are increasingly becoming the first choice of investment for modern traders.
They allow you complete independence and the ability to build a personal portfolio that suits your budget and financial goals.
- Low Cost Online Investing
Arotrade is an online brokerage that operates with significantly reduced costs compared to traditional stockbrokers and investment houses. We pass these savings on to our clients by offering competitive fixed spreads on all assets. All trading at Arotrade is commission free with no hidden fees or other charges. We work hard to reduce your investment costs and offer you the best possible trading environment.
- Flexible Investing
CFD traders can potentially profit from both bull markets and bear markets. You can open leveraged positions either as buy or sell trades and exploit any market movement. The Arotrade platform allows you to manage multiple investments simultaneously, with real time analysis and sophisticated account management. Our risk management tools and entry orders give you a high level of flexibility and control over every trade that you make.
Arotrade offers up to x200 leverage on individual trades. Boost your market exposure and potentially increase your profits when you increase your trading volume through leverage.
- One-click execution
A rapid response to changing market conditions can be vital, especially when you are managing several open positions simultaneously. Our one-click trading tool allows you to open and close positions with instant order execution.
Who Can Trade CFDs?
Online CFD trading is already a highly popular form of investment with millions of traders worldwide. Almost anybody can trade CFDs if they are willing to apply the basic principles of risk management. The Arotrade online Education Center contains all the learning tools and educational resources that you need to begin online CFD trading.
Many of Arotrade top investors signed up as absolute beginners with no experience of the financial markets. They used the Education Center and free Demo Account to master the basics of CFD trading. CFD traders range from novice investors who trade part time, to expert investors who manage complex personal portfolios on a full time basis. The Arotrade platform gives you the freedom to set your own financial goals and manage your own investments.
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