Why would I trade an Exchange-Traded Fund (ETF) CFD over trading the underlying ETF itself?
CFDs give traders a lot of options that they would not otherwise have:
- CFDs are traded with leverage
This allows a trader to control a large market position while employing a smaller amount of capital than would be required to control an equivalent position in the underlying asset. Keep in mind, leverage can significantly increase both your gains and losses.
- With an FXCM CFD account a trader has the ability to trade Shares, ETFs, Forex, Stock Indices, Commodities, Cryptocurrencies all from the same account.
- To trade the underlying market itself, a trader usually needs to have different accounts, often denominated in several different currencies, and often at different brokers.
- Immediate settlement
- Immediate access to profits vs. having to wait 3 business days when trading physical shares