What is the Spot Market? What is CFDs? These are some of the questions you are probably asking yourself as you go into researching the best possible market you can invest your hard earned money in.
You are in luck as most brokers nowadays over the best, hassle free systems for trading CFD. Some would say it is very difficult to trade CFD while others say they would rather continue doing so compared to other financial markets. This is where we find out why CFDs are a great financial market to trade in compared to the Spot Market
What is Spot Market?
The spot market is a traditional market where sellers and buyers agree on a trade price and the exchange of the two assets involved in the trade are done immediately, meaning it is done “on the spot,” hence the name.
Although this is considered as a term used as these doesn’t necessarily happen “on the spot” for most assets due to the need to make arrangements for the assets to be delivered
As an example, you want to buy 200 shares of a certain stock for the amount of $200 each. The seller says yes to the trade and sells these shares to you at the price but despite you wanting to pay for them immediately, the seller will need to to arrange for the stock certificates to be delivered to you as the actual certificates are not necessarily in their possession. For commodities like Gold and oil, the delivery times may even take longer and often a futures contract is used to facilitate this exchange.
Bottomline, the most significant aspect of the spot market is that there is an actual exchange that takes place between buyer and seller..
What is Contract For Difference?
CFD in Italy can be a great financial method for investors as most brokers in the market have created platforms specifically for this type of CFD trading.
If you are not really interested in taking an asset is there a way for you to look into selling that asset once again for a profit based on the projection that the asset will increase in value in the future? Or maybe the other way around as you believe the asset is going to decrease in value in the future and possibly even looking to profit off the decrease?
In trading CFD or Contract for Difference, you can engage with a broker based on your speculation that the future price will be lower or higher than the present price. No actual buying happens in an asset and trades are mainly made for contracts based on spreads.
Hassle free in CFD
Like we said earlier, there is no actual buying of assets in CFD and instead, you are transacting for the contracts that bases calculations off of spreads. There is no delivery of assets being made in CFD in Italy given that most traders that engage in this market are mostly not interested in holding a particular asset permanently and gives them ease on trading the value of the asset and even reduces transaction costs.
Make profits even as the markets go down
This is the market that enables you to generate profits on downward movement of markets. This is the type of trading that not only lets you earn as the market moves to a downward direction but you are enabled to do so without owning the assets. Very hassle free. Having to own an asset to “short” it and without the need to buy it at the quoted “short” price or time is something a lot of traders look for as there is no wait for any delivery. No waiting time at all.