Choosing assets for CFD trading
In the trade room window on IQ Option platform click on the plus (+) button to access the list of assets.
All non-options instruments share the same trading engine and you can trade them as CFD but they have different specification like different spreads, multipliers or overnight fees. Select a group of assets (1) than the asset you’d like to trade (2).
IQ Option trading interface for CFD trading
Set the amount of money (1) you’re willing to invest and select an appropriate multiplier (2). A multiplier will allow you to invest a larger amount than the one you have on hand which means your potential profit will be bigger.
However, the losses you could incur would also be multiplied by the same number. Click on the Auto Close (3) option to specify the stop loss and take profit price levels.
A stop loss restriction automatically closes your trading position when the losses on that trade reach a certain amount. Similarly, a take profit restriction will automatically close your position once a certain amount of profit is made.
Depending on whether you believe the asset is going to appreciate or depreciate, click buy or sell (4).
Pros and Cons of CFD Trading📊
|👍Access to a wide range of assets, including stocks, commodities, and currencies.
|👎Leverage can magnify losses as well as profits, increasing risks.
|👍No ownership of the underlying asset, avoiding certain costs and complications.
|👎Overnight fees can add up if positions are held for extended periods.
|👍Ability to profit from both rising and falling markets.
|👎Not suitable for long-term investments due to associated fees and potential for large losses.
|Profit from both rising and falling markets.
|Primarily profit from rising markets.
|Use of leverage to increase potential gains and losses.
|No leverage, limiting potential gains and losses.
|Short-term trading focus.
|Long-term investment focus.
|No ownership of underlying assets, avoiding certain costs and complications.
|Ownership of assets, with potential benefits and costs.
|Overnight fees for holding positions.
|No overnight fees, but potential management fees for certain investments.
Closing CFD transaction on IQ Option platform
The position will remain open and active either until the auto closed limits are reached or until you decide to close the deal yourself. You can manually close (1) the position whenever you see fit by clicking on the close button.
You can also adjust auto close settings by dragging levels visible on the chart (2).
Also read: CFDs On IQ Option Made Simpler.
We wish you a pleasant trading experience.
- ⚬What types of assets can I trade using CFDs?
CFDs allow you to trade a wide range of assets, including stocks, indices, commodities, and currencies.
- ⚬How do I manage risks in CFD trading?
Using stop loss and take profit levels, as well as carefully selecting your leverage and position size, can help manage risks in CFD trading.
- ⚬Is CFD trading suitable for long-term investments?
CFD trading is generally not suitable for long-term investments due to overnight fees and the potential for large losses resulting from the use of leverage.
- ⚬What is the difference between CFD trading and traditional investing?
In CFD trading, you speculate on price movements without owning the underlying assets, while traditional investing involves buying and holding assets for potential long-term gains.
- ⚬Can I practice CFD trading before using real money?
Yes, many trading platforms offer demo accounts that allow you to practice CFD trading with virtual funds, helping you gain experience and develop strategies before trading with real money.
GENERAL RISK WARNING
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