Piggy is very excited of the fact that the IronFX platform provides retail investors access to global blue-chips. Of course, margin trading has largely taken an unfair and unwarranted amount of criticism with some financial commentators insisting that it is riskier than playing casino or horse betting. In fact, some well-known financial gurus have dubbed margin instruments and derivative products; “financial weapons of mass destruction”. However, the fact is that purchasing securities on margin is nothing more than purchasing securities on credit. By employing proper risk management tools and techniques such as stop-loss orders, credit can indeed be an extremely profitable means of investing. Of particular interest are contracts of differences (CFDs), which give traders the ability to leverage any underlying instrument such as shares, currencies and indices. This involves taking a small deposit and using it as a lever to borrow and gain access to a larger equivalent quantity of assets thus amplifying potential gains/losses.
A CFD is a contract between two parties (buyer and seller), stipulating that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time. They are usually structured between CFD providers and their clients. CFDs are essentially financial derivatives that allow traders to take advantage of price movements on underlying financial instruments. They are traded over-the-counter (OTC) and there are no standard contract terms, no expiry date and once the position is closed, the difference between the opening trade and the closing trade is paid as profit or loss. A typical feature of CFD trading is that profit and loss and margin requirement is calculated constantly in real time and shown to the trader on screen. If the amount of money deposited with the CFD broker drops below minimum margin level, a margin call can be made.
One of the major advantages to CFD trading includes easy access to global markets. Investors can have access to global blue-chips through CFDs. IronFX provides CFDs on US, UK, French, German and Spanish shares. Blue chips are stocks from well-established and financially sound companies. These stocks are generally able to operate profitably during challenging economic conditions and have a history of paying dividends. Trading global shares through CFDs allows traders to take “short” or “long” positions for a specific stock without having the need to own the physical share. Some of the US shares that are available to trade through CFDs are AIG, American Express, Boeing, Alibaba, Bank of America, Citigroup, Caterpillar, Cisco, Chevron, Microsoft, Procter & Gamble, Yahoo, Facebook, Apple, Google and Amazon, amongst many others. UK shares such as Barclays, Anglo American, BHP Billiton, Tesco and Vodafone are also available.
Piggy has recommended beginners who would like to venture into the world of Global Market Online Trading to complete the babypips course. The instructions are outlined here; https://piggybankadvisor.com/2019/05/30/an-fx-trading-course-for-beginners/
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