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Two of the most popular forms of derivatives are CFDs and Options, both of which offer unique outcomes to traders. Continue reading our CFD vs options guide to discover which of these instruments is right for you.
We’ll also discuss how you can begin your CFD trading journey with us at CAPEX – The best CFD online broker for beginners and experts alike.
The benefits of practising trades on a CFD demo trading account are that you get a clear idea of where you stand as a trader, you understand the risks involved with trading an instrument. You get to practice trading by applying strategies and seeing the outcome of your demo trades. With CAPEX, you can sign up for a free demo account and practice trading without limits. We allow our demo account users to benefit from our learning tools so they can practice trading effectively until they’re ready to invest actual capital.
One of the most important aspects of trading CFDs successfully is signing up with a trading platform that is user-friendly, highly intuitive and has a simple interface. Here at CAPEX, we offer traders two unique trading platforms- The MetaTrader 5 (MT5) and CAPEX WebTrader.
Both our trading platforms are designed to provide the best trading experience for all traders. The moment you hop on to our trading platform, you’ll notice everything is easily accessible and neatly aligned on the home page. Whether you want to make a deposit, make a withdrawal, start a trade, or follow up on your investments, everything is just a click away.
Contract for difference is a popular form of financial derivatives in which traders buy and sell contracts rather than physical assets. The buyer and seller speculate on an asset’s price and make a bet on its movement – whoever’s speculation is correct ends up in profit.
In simpler terms, if a CFD trader senses that an asset’s market value is about to rise, they will invest based on that speculation by going long/ buying a contract. However, if the trader speculates that the asset price will fall in the near future, they will go short/ open a position in the market.
Here at CAPEX, we offer CFD traders over 2100 tradable instruments along with several tools and features to reduce the riskiness of CFDs. For instance, you can learn trading through our excellent learning tools and features, follow our expert trading blogs to keep up with ongoing market trends, and even follow expert traders through a feature available on our MT5 trading platform.
Experience a new level of trading with the right support when you need it. Sign up for a free account and trade smart with CAPEX.com.
Options are another famous type of financial derivative in which a trader gets the right to buy or sell an asset or security on a fixed date at a specific price. However, this right comes with a cost, which is known as ‘premium trading cost’. If an option buyer pays a premium, but the market prices don’t go as he presumed, they can let the option expire to ensure the loss doesn’t exceed the cost paid as a premium.
There are two selections in options trading, ‘call’ and ‘put’. If the buyer chooses the call option, he or she gains the right to purchase a given asset at a predetermined date in the future. If the buyer opts for the put option, the buyer will obtain the right to purchase an asset at a predetermined price in the future.
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First, let’s go over CFD vs options similarities. The primary similarity between CFDs and options is that both are derivatives. Another similarity worth noting is that both instruments are traded with leverage. However, there are several differences to be considered between the two instruments as well. For instance:
Trading with a low fee broker means you get to cut costs and keep most of the profits to yourself. Doesn’t that sound fantastic? CAPEX allows traders to invest in over 2100 instruments with the lowest trading fees. The spreads on our platform and our commission rates are lower than the market average, and we don’t have a deposit or withdrawal fee. The best part is that despite charging the lowest fees, we’re able to offer the best CFD trading experience to our users.
Now that we’ve discussed the process of trading CFDs and options along with the pros and cons both instruments offer, it’s time to answer the million-dollar question ‘What’s the better instrument for you?’
No instrument is better than the other; it all comes down to what you’re looking for as an investor. If you’re looking for a more flexible trading option where you aren’t under any obligations to purchase or sell an asset, options might suit you better. However, if you’re someone who has limited capital, wants to invest in numerous markets to diversify your trades, and would prefer trading a simpler instrument, CFDs should be your go-to option.
With us at CAPEX, you can trade CFDs on over 2100 unique trading instruments on our smooth trading platforms. Plus, we offer some of the lowest trading fees while ensuring our users have the best possible trading experience with available customer support, numerous learning tools, and a wide range of instruments to invest in.
Here are a few benefits CAPEX offers its traders:
Our users are our number one priority, and we’re dedicated to providing traders with the best CFD trading experience from every aspect.
RegisterRegister an account on CAPEX.com and start trading.
VerifySend over your documents and verify your account.
DepositLogin into your CAPEX.com account and deposit money.
TradeStart trading with CFD’s and over 2100 other instruments.
Signing up with us at CAPEX couldn’t get easier. Follow these simple steps to begin your trading journey with us today:
Once you’ve finished the registration process, your account will be verified in no time, and you can begin your trading journey without any minimum deposit requirements. However, we do recommend practising on our CFD trading demo account beforehand to ensure you’re prepared to invest your money.
The key to choosing which instrument to trade is learning about the pros and cons each instrument offers and aligning them with your trading goals.
In our options vs CFD guide, we reached the conclusion that CFDs are ideal for traders who have limited capital and want greater opportunities to begin with. In contrast, options might be the better choice for someone who wants more control over their trading experience or doesn’t want to be under any obligations.
Although CFDs definitely offer more pros and fewer cons when compared to options, so there’s no harm in giving CFD trading a try. So, if you want to give CFD trading a try with one of the best CFD trading platforms out there, sign up with us at CAPEX within minutes and begin trading CFDs on over 2100 instruments, that too, with the lowest trading costs.