Stock Brokers have made it possible for stock traders to trade stocks also as CFD. Trading stocks as CFDs is very similar to trading Forex CFDs. One major reason why stock traders are attracted to stock trading as CFDs is the leverage advantage provided by brokers for trading stocks as CFDs. This work will therefore help you learn how to trade stocks as CFDs. You will also find in this work the list of best stock brokers that allows you to trade stocks as CFDs.
Meaning of stocks
Stocks are companies’ shares offered for public sales after it has been listed on the stock exchange market. Stock trading allows the individual to partake in the ownership of a company when they purchase its shares. Holders of a company’s shares hope to receive dividends from the company and look forward to selling them at higher prices.
What does it mean to trade stocks as CFDs?
Trading stocks as CFDs is quite different from the usual means of stock trading which involves the purchase of a company’s shares in the hope of receiving dividends. Stocks CFD trading is a leveraged form of trading provided by stock brokers which allows the trader to speculate on the future prices of a given stock without owning the underlying stocks. Here, there is no legal ownership of the stocks purchased. The trader only hopes to benefit from the price volatility of the purchased stocks from his entry up to exit point.
However, the trader can only make profits when he makes correct predictions.
Where can one trade stocks as CFDs?
Trading stocks as CFDs is made possible through forex CFD brokers. To trade stocks as CFDs, the trader will need to register with the CFD brokers offering stocks on the platforms. Next, he will need to complete the registration process and fund his account to begin trading.
Step-by-step guide on how to trade stocks as CFDs
- Choose a CFD broker:There are many CFD brokers out there in the market today seeking for new traders to join their platforms. However, one has to be careful to choose only the regulated brokers to ensure that his assets are safe and the prices will not be manipulated against him.
- Create an account with the Broker: Once the trader has identified a reliable broker for trading, the next step is to create an account with the broker. Brokers usually provided a registration form to be filled by the clients on their website during the registration process.
- Complete the identity verification process:After filling out the form provided by the broker on their website, the trader will be further required to upload his identity verification documents and proof of address on the broker’s platform. This is meant to enhance the security of his account.
- Fund your trading account:Once the created account has been approved, the trader will need to fund it with the amount he would like to trade with. Often brokers provide multiple options for funding to make it easy for the traders to fund their accounts.
- Select the stock to trade on the platform:After the trader has funded his account, he can now proceed to choose the stocks he would like to trade, from the available stocks provided for trading on the broker’s platform.
- Place your order: The trader can now decide which position to take in the market, whether to go “long” or “short” after proper market analysis and forecast.
List of stocks CFD brokers
- Hantec Markets
- Interactive Brokers