Traders, today, are increasingly resorting to online gold trading – thanks to the present economic meltdown. Gold has been traditionally considered a safe trading option- especially during economic crunch. Whenever there is a crisis you will notice an upward trend demonstrated by gold. The fact that it’s considered a safe investing option makes it an ideal hedging vehicle against market meltdown. Gold is an asset with an intrinsic value, which, it is believed, is difficult to beat – no matter in which direction the market moves. Shares and bonds, on the other hand can fall sharply with negative economic data. Financial turmoil is almost regularity today. Needless to say, gold trading has emerged as a more frequent practice today than what it had ever been before.
Besides all the merits mentioned above, trading gold remains an exciting way to diversify your portfolio and offset your risks as well.
You can trade gold via futures and CFDs. Today, however, we will particularly be explaining gold cfd trading and its merits.
Trading gold via CFDs: What do you need to find out about it?
Trading gold via CFD is a popular vehicle to secure leveraged exposure to precious metals. It refers to a hypothetical order to buy or sell a specified amount of gold. The profit or loss on the order is governed by the change in price of gold. It works as a derivative – owing to which you are not required to own the metal but are still entitled to enjoy all the profits generated by the same. Listed below are just a few advantages of gold CFD trading that you should make yourself aware of.
Online Gold CFD Trading: Unlocking its advantages and more
Gold cfds are the most liquid commodities that you can actually end up trading with – simply because of the fact that they remain one of the most commonly traded commodities today. The spread is tighter and traders can enter and exit positions with noted ease – irrespective of what the trade size is. Here are other advantages of Gold CFD trading.
What is the size of your contract? It doesn’t matter. Regardless of what the size of the CFD contract is the profit or loss made by you is dependent on the value of the amount of gold. The margin required to buy the contract can be as low as 3% of the value. You will be charged interest on daily basis (just as what would have happened if you had borrowed money from the broker to buy the entire quantity of gold). If you have a position when the price has plummeted, you will end up receiving an order or margin call from your broker asking you to submit funds to cover the losses till date. Do remember this point before initiating your trading actions.
As a trader, you have access to several variations on gold CFDs. As per your convenience, you can choose to trade with the spot price (the price which is currently quoted) or a future price.
Choosing the broker
There are brokers who actually provide you the scope to trade gold 24 hours a day 5 days a week. You can trade the asset long or short, based on your market speculations (i.e. regarding the direction in which the market will turn). This offers you the scope to profit even from a downturn.
Choose a broker that is regulated by well known Forex regulator
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