The increasing popularity of CFD trading in Singapore can be attributed to the ability to sell in financial markets without prior ownership.
It is like selling something you borrow from a friend and then buy at a lower price and return it. Open an account for CFD trading in Singapore and you will be able to the same with any financial instrument. In financial markets this is known as short selling.
CFD Trading in Singapore: What Does Short Selling Mean
Short selling means selling without prior ownership. CFD trading Singapore is a system of trading in financial instruments involving settlement of positions on the basis of price difference. There is no physical ownership involved. The contract is between the trader and the CFD provider which stipulates that the seller will pay the buyer the difference between the opening and closing values of the contract. If the outcome is negative, the buyer pays the sellers.
Each CFD has an underlying asset, which may be a share or currency pair or a commodity or a market index. CFD trading does not imply trading in the underlying asset. It is trading in a financial derivative product, which you can sell without buying it first.
CFD Trading in Singapore: Why Go Short
When you sell a CFD, you are actually betting on the price of the underlying asset going down. In traditional trading, traders have no choice when they see that markets are falling. If the downturn continues over a long period, it is like a long holiday. Traders can either refrain from trading or sell whatever they have in their portfolio. CFD trading Singapore offers an opportunity for benefiting from a falling market as well. The idea is to sell now and hope to buy later at a lower price.
