Singapore Stock Exchange- Time to Invest in Cfd Trading

Author: singapore trader

Trading the Singapore Stock Exchange is one of the most exciting exchanges to trade. In order to help you maximize your returns on trading the Singapore Stock Exchange, CFD trading or Contracts for Difference Trading is what most traders are now using to trade when short term trading on the Singapore Stock Exchange. With this exciting new trading toll CFDs becoming the used more and more by the average trader, as well as the professional trader. If you are trading the Singapore Stock Exchange then you should be using CFDs instead of traditional share trading.

As the name suggests, Contracts for difference (CFD) is an agreement entered upon by two parties, whereby they decide to exchange the difference between the opening price and the closing price of a stock. Contracts for difference (or CFDs as they are sometimes referred to) mirror the performance of a share or an index. Contracts for difference (CFDs) can be traded on equities (shares), index trades, FOREX and commodities. Contracts for difference allow investors to take long or short positions, and unlike futures contracts have no fixed expiry date, standardised contract or contract size. Contracts for difference are traded on margin, and the profit/loss is determined by the difference between the buy and the sell price. Contracts for difference (CFDs) are instruments that offer exposure to the markets at a small percentage of the cost of owning the actual share. Contracts for difference provide an excellent vehicle for short term trading strategies and are the preferred vehicle amongst hedge funds and professional traders. You should be aware, there are two different types of contracts for difference providers, one is more like a traditional spread better where you are trading with the CFD provider and have to trade on their prices. With the other provider, your contracts for difference orders or more strictly the hedge for your CFD orders is sent directly to the SGX order book.

WHY CFD's

CFD trading is growing in popularity increasingly quickly, As retail investors recognise their benefits. CFDs use the power of leverage to trade which is one of the key reason they are such a powerful tool. CFDs give the owner the benefits of share ownership without physical ownership of the underlying security. Contracts for Difference are strictly for the active trader, someone who is skilled enough to use the flexibility and agility these holdings offer. CFD's are traded in a similar way to ordinary shares.

CFD brokers are now mostly online and use electronic platforms, which makes the trading routine a lot faster. CFDs can also be used for hedging and so can also reduce overall portfolio risk. CFDs can be used for short selling, Margin Lending does not allow this. CFDs tend to carry a lower interest rate component than Margin Lending. CFDs are short term trading instruments while Margin Lending is more for medium to long term investment strategies. So if you are going to be trading the Singapore Stock Exchange then you should seriously consider using contracts for difference.

CFD BROKERS

CFD brokers are now mostly online and use electronic platforms, which makes the trading routine a lot faster. If you already know about CFD, you might be interested in finding CFD Brokers near you. Some brokers, use real prices with no hidden charges added to the bid/offer spread, and fees are levied separately. Others claim to offer commission-free trades, but the cost is usually factored into the spread. To find the best broker feel free to visit our website at CFD FX REPORT or email support@cfdfxreport.com

Article Source: http://www.articlesbase.com/investing-articles/singapore-stock-exchange-time-to-invest-in-cfd-trading-716856.html

About the Author

CFD FX Report www.cfdfxreport.com is a real time tool for clients with an interest in the trading of stocks, indices and commodities globally.CFDs (Contracts For Differences) are one of the worlds' fastest growing trading instruments that allows clients to profit from a rising and falling market. The CFD FX Report is a company comprising of expert traders that analyse the market daily and are able to make recommendations for the following day trades based on this analysis. The CFD FX Report is released everyday at 6.30 p.m. (Singapore time) for review by the clients for the next trading day.