10 CFDs You Can Trade

Does one require in-depth knowledge of how the stock exchange works before purchasing CFDs?

No. In fact, it will only take you 20-30 minutes to understand CFD market. YouTube contains informative videos that help budding Australian traders hone their trading skills. CFDs are affordable hence making it easier for you to leverage capital favorably.

Here are 10 trading CFDs accessible at your nearest stockbroker.

1. Commodities

In investment, a commodity is a good that’s used to produce products and services. Oil is a popular commodity because it’s directly used to obtain fuel. Wheat is the main ingredient used in the baking industry.

Certified Australian stockbrokers trade commodity-CFDs such as natural gas, silver, gold, and crude oil. The margin rate varies from 0.75-3 percent. There are two types of commodity-CFDs. If you want quick returns on your investment, you can invest in a cash commodity-CFD. Australian traders who are anticipating higher returns invest in forward commodities. These take a longer date compared to cash commodity-CFDs.

2. Stock Indices

Have you ever heard about The S&P500 mentioned in Australian traders’ forums? A stock index is a portfolio of securities that’s either representing an entire financial market or a significant portion. The S&P 500 represents 70 percent of financial stocks currently available in the United States.

In indices-CFD trading, the investor makes a profit when the CFD reaches the agreed level within a specified date. Some financial consultants recommend stock indices-CFDS because they are more stable compared to owning a portfolio of diverse stocks.

3. Forex

You can leverage your Australian dollars for lucrative returns thanks to Forex or FX CFDs. You may need as little as 5percent margin to purchase an FX-CFD. The investor can choose from over 300 FX pairs that are either cash-based or forward.

4. Exchange Traded Fund

An ETF (Exchange Traded Fund) is a financial instrument that allows investors to freely buy and sell shares of a specific commodity, stock, or indices cluster. Just like a mutual fund, your capital contribution entitles you to partial ownership of the entire investment. The difference is that you can sell your ETF at will.

5. Treasuries

Treasury CFDs enable Australian traders to benefit from diverse government financial securities such as bonds, bunds, and treasury bills. You can purchase and sell treasury CFDS from the U.K, Europe, and United States. These CFDS are highly affordable because the margin ranges from 0.25-1.5 percent.

6. Single Stocks

Single stock CFDs are popular because you can profit whenever a share price drops. Stockbrokers offering single stock CFDs give investors a chance to maximize their capital returns by investing in globally renowned securities such as Apple, Google, Yahoo, just to name a few.

You may pay a margin of 3-5 percent depending on your CFD broker. This is suitable for investors who want to benefit from price movements of costly blue-chip stocks.

7. Cryptocurrencies

Bitcoin surprised the entire world with its tremendous appreciation in value within a decade. Nowadays, you can purchase cryptocurrency-CFDS with the aim of maximizing your returns based on price increase and decrease.

8.Sector-based CFDs

A sector-based CFD constitutes of select company shares from the same industry. Financial brokers select the best-performing stocks and cluster them into one group. It’s advisable to purchase sector-based CFDs when the industry is or just about to experience a boom.

9. Inflation-CFD

Inflation CFDs enables investors to profit from predicted changes in the Consumer Price Index. The Consumer Price Index is a statistic that shows overall price change in a cluster of products. It usually consists of daily items such as bread, groceries, cellphone minutes, and fuel.

10. Carbon Trading-CFD

The carbon pollution program in Europe enables companies to sell off their unused emissions. This trade allows investors to capitalize on the price changes of carbon emissions through carbon trading-CFDs. However, carbon trading-CFDs are only available at select stock brokerage firms due to the controversy surrounding carbon emissions trading.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.