Though stocks and currency pairs might be more famous, CFDs are an equally profitable asset class available to traders and investors. Thanks to a new service by SuperForex, people can now trade CFDs in an innovative, more profitable way.
What are CFDs?
Contracts for difference (CFDs) offer a simple way to trade an asset without owning it. Instead, the trader essentially makes a bet with the broker about how much the value of that asset will change within a set period of time.
Thus, traders can bet an asset will become cheaper or more expensive.
The fact that the investor does not own the asset is a great advantage. For example, if you want to make a profit from stock trading, you will have to invest a lot of money into buying a company’s shares.
Then you will need to wait for an unknown amount of time for the share value to rise. Only when it has risen significantly will you be able to sell the shares back at a profit.
CFDs eliminate these difficulties. Traders only need to bet on the change in value, without purchasing the asset.
In addition, the Execution and profitability of CFDs is considerably faster than trading other instruments.
SuperForex CFD Groups
Although CFDs are part of most brokers’ portfolios, SuperForex has come up with a new way to present these assets. The broker introduced CFD groups, where companies are banded together according to their industry.
In other words, SuperForex customers can trade the joint CFDs of all major companies within a single field in one order.
Some of these CFD groups include:
- Automotive CFDs, which include shares of all major carmakers;
- Pharma CFDs, where you can find all major pharmaceutical companies and vaccine-makers;
- Financial CFDs - banks and other financial companies;
- Retail CFDs - retailers and marketplaces like Amazon, Ebay, Walmart, etc;
- IT & Techno CFDs - the go-to group for tech stocks, e.g. Facebook, Google, Apple, Microsoft;
- Aircraft CFDs - airlines and aircraft makers.
For a full list of all CFD groups, please consult the broker’s website. These CFD groups can be traded via an ECN account with SuperForex.
Advantages of Trading CFDs in Groups
The last couple of years have shown that market trends tend to affect whole groups of companies rather than individual firms. For example, in 2020 the share value of many pharmaceutical companies increased due to the pandemic.
Investors focused more on this industry as companies sought to develop Covid-19 vaccines and other drugs.
Sometimes, however, a company might do worse than its counterparts due to internal issues. Case in point, while Moderna, Pfizer, and BioNTech have done well, AstraZeneca struggled a bit.
The company’s vaccine faced much more controversy than the rest. In this scenario, an investment in pharma companies as a whole would have been profitable, while an order concerning AstraZeneca only might have brought a loss.
As it turns out, investing in all major companies within a given field is a better way to hedge your funds. For this reason, the CFD groups developed by SuperForex offer a greater chance of success.
