Main theses and notions about CFD trading
Digital asset or asset with financial profit — this is the same instrument, different names of which can be met both in literature and traders' language. When CFDs are used in trading, market player's task is to predict growth or drop of price of the asset that he has used in the pre-set moment of time. For illustration: the asset chosen for trading is Apple shares, pre-set time interval is the end of the day. Thus, in order to purchase an asset, the trader has to guess which way will the price for Apple shares behave to the end of the day: will it grow or will it drop.
Base asset is shares or other securities, goods, currencies or indexes, in the presence of which there is the possibility to enter the fixed-term contracts.
Execution time. CFDs are executed during the time interval that is chosen by trader, when the player believes that his prediction about price growth or drop will come true. Thus, financial instruments expire at the moment of their execution, which means that it becomes obvious whether the predictions was correct exactly in this time interval.
Execution level – this is the price level of chosen asset at the moment of financial instrument execution. In other words, when financial instruments expire. Correctness of trader's financial prediction is defined by comparison of execution level to purchase level, or strike-price.
trike-price (purchase level) is the cost of chosen base asset at the period of its purchase. In order to determine whether investor's prediction has become correct, the level of asset is compared to its strike-price at the moment of its execution.
Commodity asset – financial instruments, base asset of which is exchange commodity. These are oil, precious metals, coffee, sugar, and so on.
Currency asset – inancial instruments, base asset of which is a currency pair. Financial instruments trading offers traders the main currency pairs, i.e. major group: EUR/USD, USD/JPY, GBP/USD and others.
Stock asset – financial instruments, base asset of which are shares or securities. Traditionally, applies to its platforms shares of the most known and significant companies.
Index asset – financial instruments, base asset of which is stock index, such as Dow Jones, РТС, S&P 500, DAX and others.
Deposit — the amount of funds necessary to start trading, which investor should deposit to the account opened on the platform or trading site.
Investment – he funds that the market participant pays for asset purchase. Minimum investment in our company makes up $25. In case the trader manages to determine the financial forecast competently, then he obtains the profit in the amount of a definite percent from the sum he chose as the investment into financial instruments.