Ironfx lets trade CFDs for six commodities. Many people may not want to own the asset itself to make a profit. It is where the derivatives come into play. Let’s take a deeper look.
Derivatives are instruments that trade on the market value or price of the asset, rather than the asset itself. Here, the value of the derivative depends on the underlying asset.
For example, one may speculate that the price of a certain share will increase, and they want to earn through this opportunity. But, they may not want to own a share. Here, the derivative provides them the opportunity to make a contract. The trader trades on the value of the asset, and if it favors them, they earn from it. However, if the situation does not favor them, they might lose value.
Ironfx lets you trade one such derivative called Contract for Difference (CFD). Following are some of the features of CFDs:
• In CFD, you can trade on the underlying assets at a marginal rate rather than providing the full value and ownership of the asset.
• Your earning of trading CFD is the difference between when you enter the trade and when you close or exit the trade. Thus, it is called a contract of difference.
• It is based on the leverage effect. It is when you can trade on a significant position without investing large capital.
• You can speculate the value in both directions i.e., increase in value or decrease in value.
• Going long: It is a concept where you speculate that the value will increase and thus, you buy CFDs.
• Going Short: It is when you speculate that the value you will decrease and thus, you sell the CFDs.
• In Ironfx, you can trade CFDs for six underlying assets. These are forex, commodities, indices, futures, and shares.
