For the inexperienced, there can seem to be a bewildering number of ways to trade your money. Technological advances have made these more accessible than ever, with the best trading platforms now available on PC, mobile phone and tablet. So what are the choices out there for the would-be financial trader?
Stocks: The go-to choice for many first-time investors. Buying shares on the traditional markets can offer good long-term returns, though it is worth considering some of the other trading vehicles on offer.
Contracts for Difference: Contracts for Difference (CFDs) are a financial derivative. The contract is an agreement that one party will pay the difference in price from when the contract was opened to when it was closed. CFDs offer a way to trade the markets without having to purchase the underlying asset. This allows traders to go short as well as go long on an asset, making CFDs a popular choice for hedging portfolios.
Trading CFDs gives you access to leveraged trading, meaning you can gain a far larger exposure to the market than you would with other forms of trading. This isn’t without its risks, however, as you can end up losing more than your initial deposit. You can find out more about how CFDs work here.