CFD Spread Trading
Made4Trading offers a trading product called CFD Spread Trading. It is easy to use and it is easy to explain how to use it.
For every financial market instrument in the world, there is a buy price and a sell price. The difference between the two prices is called the spread. CFD spread trading is a way that you can speculate on many different markets including Global Indices, FX, Commodities and Stocks without having to take a position in the actual market.
You simply take a contract with a broker like Made4Trading where we quote the buy and sell prices of that market. Our quotes on all our markets mirror the real market. So, our prices of Gold, for example, will move up and down in line with the market price of Gold.
You provide us with a margin needed to take out the position (you don’t even have to provide all the capital), and the difference between where you execute your buy and your sell trades will be your profit or loss. It’s that simple.
CFD Spread Trading Example:
In the following example you live in Asia and your account base is in US Dollars (USD).
Let’s say you want to trade the DE 40 index. With a typical trading account, you will have to nominate your stake size per point in Euros (because the DE 40 is traded in Euros).
Once you close your trade and have a profit or a loss, the proceeds get converted back to USD. You will pay FX conversion costs on each trade not in your base currency.
With a Made4Trading CFD Spread Trading account, every trade is in the base currency you choose, no matter what instrument you trade.
When you select USD as your base currency, it means that your “stake” will be in USD, even when you trade, say the DE 40 (normally in Euros), or the UK 100 index (normally in GBP), or Dollar Yen (normally in Yen per point).
Each time you place a trade on a Single Currency Account, your stake size, as well as your profit and loss, will always be calculated in your own base currency with no FX conversion fees.
CFD Spread Trading – A Made4Trading Product
We sometimes use the words “Single Currency” to illustrate the point that your trading currency, the one your stake is nominated in, is always the same.
You can select from multiple different “base” currencies, that you can use every time you trade.
For example, if you live in England, you probably want to use British Pounds as your trading currency in all your trades.
However, if you live within the European Union, and your day-to-day currency is Euros, you will probably want to execute all your trades in Euros. If you live in Denmark, then you will probably want to trade in Danish Kroners.
What Does This Mean?
Let us Give You an Example.
Normally, when you trade an instrument, your stake size (what you risk per point movement) will be determined by the currency of the country where the product resides.
The problem many people have is understanding their stake size in a foreign currency. Wouldn’t it be nice if you could nominate your stake size in your own local currency, even when you are trading foreign instruments? With Made4Trading you can do exactly that.
What Made4Trading offers you is the ability to trade say the UK 100 Index in whatever currency you desire. If for example your base currency is Euros, everything you trade on the Made4 Trading Trader1 platform will be in Euros, including your UK 100 Index trade.
This eliminates confusion over exchange rates between your base currency and the instrument currency. It also eliminates fees from converting your profits or losses from a foreign currency back to your base currency. And finally, when trading instruments like FX, it removes any confusion about trading in exposure or lots sizes.