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Understanding CFDs

CFD Stands for Contract for difference.

It is a type of financial tool that enables you to invest in global assets, whereby the investor pays for the assets but without actually owning them. CFDs are uncomplex, flexible and are an explicit method of trading online.

Making a CFD investment in any asset is done with the aim of making profits from the difference in the selling/market price. Your gains are calculated as the difference between the asset price at an opening position and the price of the assets at a closing position.

By using leverage at Barclay Stone, you can increase your investments on individual assets by up to x400. Using leverage permits you to expand your exposure on the market with the potential of increasing your profit with a smaller initial investment.

A major factor that makes CFDs appealing to many is their simple nature. You can open a CFD trade on an essential asset at a Buying or a Selling position. The principle is simple and obvious:

  • You open a BUY position if you are expecting the price to go up in value
  • You open a SELL position if you are expecting the price to go down in value

AN EXPLANATION TO CFD TRADE

You purchase USD 250 with Euros. After a week, you convert dollars to euros. By doing that, for example, you get the profit of $75.

How?

The $250 was initially purchased a week ago at 0.9 EUR. Now, the USD market price is 1.2 EUR. This 0.3 rate movement earned you $75.

You made a profit by following the fundamental market principle of buying at a low rate and selling at a higher price. If you had leveraged your initial investment your profits could have multiplied in direct proportion to the leverage used.

$250 x two hundred leverage = $50,000
$50,000 x 0.3 rate movement = $15,000

Efficiently predicting the market performance of the asset increases your chances of making substantial profit, especially if you leverage your trade. A profitless investment only means, losing money allocated to that specific trade, without being subjected to further losses or liabilities.

Reasons for Trading CFDs?

At Barclay Stone a standard cost has been introduced to replace outdated methods such as commissions and hidden charges. Trading CFDs allows you to follow each stage of your investment and to see all your potential income, expenses and trading history at a glance. Barclay Stone manages a narrowed down on-line brokerage with a minority of the costs that were associated with the old fashion investment homes and stockbrokers. These conditions allow our traders to have one of the best conditions for investing and minimize their expenses.

Traders at Barclay Stone have immediate access to as much as x400 leverage on condition that a sufficient initial margin is maintained by traders to cover leveraged trades. A leverage allows you to substantially increase the volume of any trade, potentially increasing your profit proportionately.

Trading with Barclay Stone grants you access to conducting leveraged trades on several hundred assets including: forex, stocks, commodities, indices and cryptocurrencies.

Unlike conventional trading, you don’t own any asset, eliminating the need for any excess documentation, paperwork and contractual arrangements with any third parties.

With regards to CFDs, Trading with Barclay Stone is as simple as anything can be. Just sign up with your details, fund your steady trading account and instantly begin trading.

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Leverage

Leverage gives you exposure to diverse financial markets with a small capital. This enables you to increase your general profits due to the fact that they're based on the wholistic investment amount of the position.

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Diversification

Dispersing your investments across a variety of assets produces a diversified portfolio, protecting traders from market volatility as well as decreasing risk exposure.

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Risk management

Practicing good and effective financial management is invariably a possibility owing to the existence of the stop loss/take profit parameters. These aid by automatically closing positions in case of any decline or rise beyond expectation, allowing you to regularly maintain and monitor your risk level.

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Profit opportunities

In rising and declining markets, there is still a possibility to benefit in terms of making profits in CFD trading. As the prices of assets rise, you can open a BUY position and vice versa.

Who Can Trade CFDs?

CFD online trading is a widely known method of investment with many traders globally. Virtually anyone, especially people with the knowledge and skills of risk management principles can trade effectively. Barclay Stone Online Education Canter has the tools and resources needed to commence online CFD trading.

A majority of Barclay Stone’s major investors signed up as novices with the absence of prior experience, making use of the Educational resource centre and free Demo Account in order to grasp the fundamentals and gain mastery of CFD trading. CFD traders range from amateur investors who trade part time, to expert traders who manage complex portfolios on a full-time basis. The Barclay Stone platform provides the opportunity to set your own financial goals and control your own investments.

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