CFD Trading

The term “CFD” is an abbreviation of “Contract for Difference” which refers to the trading instruments that empower you to trade on the price differences.

CFD trading hours can vary according to the market you are trading in. Apart from forex currency pairs and cryptocurrencies, financial assets which are listed on a specific stock and commodity exchanges are tradeable only during their business hours. Please visit our trading hours page for more information.

Commodities are physical resources which are often industrial raw materials. In the financial markets, commodities are typically grouped into categories. Types of commodities include precious metals (e.g., gold, silver, platinum), industrial metals (e.g. copper, steel), energies (e.g., crude oil, natural gas, gasoline), and agriculture products (e.g., sugar, corn, coffee).

Stocks are ownership portions of publicly traded companies. In the financial markets, stocks are typically grouped based on their country of origin. Stocks are often grouped as U.S. stocks (e.g., Amazon, Apple, Facebook) which are traded on NYSE or NASDAQ exchanges, European stocks (e.g., Barclays, Renault, Siemens), and Asian stocks (e.g., Softbank, Sony, Toyota).

Indices are performance trackers of baskets of stocks curated by the creator. In the financial markets, indices are typically grouped based on the companies included in the baskets and their trading hours as American indices (e.g., Dow Jones 30, S&P 500, NASDAQ 100); European indices (e.g., FTSE 100, DAX 30, CAC 40); and Asian indices (e.g., NIKKEI 225, TADAWUL, HANG SENG).

Digital Currencies are digital assets which were recently introduced as a new form of currency based on advanced technologies. In the financial markets, Digital Currencies are typically grouped as Bitcoin (the Bitcoin cryptocurrency itself) or altcoins (e.g., Ethereum, Ripple, Dash).

The price of a CFD instrument follows the price of the underlying asset in real-time. For example, if Coca-Cola (NYSE: KO) stocks are trading at $47.50/share in the New York Stock Exchange (NYSE), Coca-Cola CFDs would have the same price. The price of the CFD will change in real-time as the price of Coca-Cola shares change.

Leverage is a trading mechanism which enables you to open trading positions larger than your initial capital. When using leverage, you’re able to open larger position sizes; therefore, the amount you gain or lose per pip movement increases. It can increase your profit potential; but use it with caution, as it can also cause losses in the same way.

The pip signifies the most basic price change unit. In forex currency pairs, a pip is the fourth decimal in the price of a currency pair. For example, when the EUR/USD currency pair is trading at 1.1856, pip is the “6” at the end (the fourth decimal). If EUR/USD rises to 1.1860, the new pip would be “0”, and the pair would be said to have risen 4 pips.

Spread is the difference between the selling price and the buying price of a currency pair. In Forex trading platforms, each pair would have two prices: Bid is the selling price and Ask is the buying price. Spread is calculated in pips and often represents some of the broker’s commission. It is charged automatically when a position is opened, and many traders often don’t notice it. One of the ways Captainmarkets makes money is based on the spreads from traders’ transactions.

Our vision at Captainmarkets is to enable everyone to obtain the power to reach economic independence, and we believe CFD trading is the most viable financial solution for the majority of people. In alignment with our goals, we’ve created a comprehensive education platform for trading how to trade CFDs. Discover how CFD trading works, the tips and tricks of CFD trading, popular trading strategies, and easy-to-use market analysis methods.