Advantages and Disadvantages of Trading Share CFDs
Benefits of trading CFDs
- Individual shares can experience large price moves as companies fall in and out of favour.
- CFDs allow traders to profit from rising and falling share prices and to use leverage to increase exposure.
- Share CFDs can be used to trade pairs. A par trade comprises a long position in one stock and a short position in another stock.
Things to be aware of
- Share prices can move quickly or gap when unexpected news hits the market.
- As with any leveraged instrument, large losses can result from poor risk management.
- When trading share CFDs, traders should keep up to date with company news.