Benefits of CFD Trading

The way that the stock market works has changed and different forms of investment are used these days. One method of trading that is emerging as popular is CFD trading. CFD stands for Contract for Difference and is used in online stock trading. It requires the trader to bet on the value of the stock price at the closing point of sale. The buyer will then pay the difference between the starting and finishing price if the trader is correct. If the value goes the other way, however, the trader will then pay the difference.

Although CFDs first started being used in the 1990s, they only really gained popularity in 2000, when retail traders realised their benefits. The major benefit is that you can trade on an instrument without actually having to own it, but also that there is no stamp duty to pay. As opposed to traditional share trading, CFD trading requires much less cash outlay because you do not own any stock.

Central Markets are an independent stockbroker based in London. They provide traditional share trading as well as trading with CFDs, and a complete advisory service. As a privately owned stockbroker, Central Markets have retained all the benefits of a small company while working on a large scale. They keep the client at the centre of all their processes and have a high focus on customer service. Every client receives an individualised service and is assigned their own Sales Trader who will work on their behalf. Central Markets also introduced the Treat Clients Fairly policy, which has two main aims of making information and services easy to understand and only offering them suitable products. All Central Markets employees are trained in this principle and it is key to management that this is put into practice.

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