Trading Share CFDs

What are Share CFDs?


Share CFDs, also called stock CFDs, are contracts for difference on individual shares. They allow traders to speculate or invest in both positive and negative price movements without actually having to buy or sell the underlying share.

A contract for difference is a derivative that allows a trader to participate in price movements without owning the underlying asset. With CFDs, traders can use leverage to increase their exposure, giving the trader flexibility to profit from rising and falling prices.

Share CFDs give traders the opportunity to profit from the volatility of individual stocks as prices rise and fall with changing market sentiment and news events.

EightCap Australian Share CFD Trading

EightCap traders can access the top 200 individual Australian shares via their Meta Trader 5 trading account. These shares represent the largest ASX listed stocks and as a collective, represent the S&P/ASX 200 index.

Top Share CFDsTrading SymbolTrading Hours (Server Time)
Commonwealth BankCBA10am - 4pm Sydney time
BHP Group LtdBHP10am - 4pm Sydney time
Westpac Banking CorpWBC10am - 4pm Sydney time
CSL LtdCSL10am - 4pm Sydney time
Woolworths Group LtdWOW10am - 4pm Sydney time
Wesfarmers LtdWES10am - 4pm Sydney time
Telstra CorporationTLS10am - 4pm Sydney time
National Aust. BankNAB10am - 4pm Sydney time
RIO Tinto LtdRIO10am - 4pm Sydney time
Top Share CFDsTrading SymbolTrading Hours (Server Time)
Commonwealth BankCBA10am - 4pm Sydney time
BHP Group LtdBHP10am - 4pm Sydney time
Westpac Banking CorpWBC10am - 4pm Sydney time
CSL LtdCSL10am - 4pm Sydney time
Woolworths Group LtdWOW10am - 4pm Sydney time
Wesfarmers LtdWES10am - 4pm Sydney time
Telstra CorporationTLS10am - 4pm Sydney time
National Aust. BankNAB10am - 4pm Sydney time
RIO Tinto LtdRIO10am - 4pm Sydney time

Pros and Cons of Share CFDs

Share CFDs allow traders to speculate on anything that may affect an individual company share price. These can include earnings releases, new product releases, industry news and economic data. CFDs allow traders to enter long and short positions, and increase their exposure by using leverage.

Traders can also use share CFDs to hedge trades by holding a long position and a short position in the same stock. You can also open a long position in one stock and a short position in another stock.

However, share prices can be very volatile, and one news item can cause large price moves. When leverage is used, potential losses can be amplified, so risk management and discipline should be included in your trading plan.

Benefits of trading CFDs

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Individual shares can experience large price moves as companies fall in and out of favour.

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CFDs allow traders to profit from rising and falling share prices and to use leverage to increase exposure.

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Share CFDs can be used to trade pairs. A par trade comprises a long position in one stock and a short position in another stock.

Things to be aware of

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Share prices can move quickly or gap when unexpected news hits the market.

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As with any leveraged instrument, large losses can result from poor risk management.

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When trading share CFDs, traders should keep up to date with company news.

Trading share CFDs vs. Index CFDs

An index reflects the average movements of all the stocks within an index, which can result in lower volatility.

Share CFDs reflect the price movements of individual shares which can be more volatile. While it’s rare for one news item to move an index more than a few percent, it is fairly common for a share price to move 5% or greater in a day.

Share CFD trading concentrates on a single company, while index CFD trading concentrates on overall market sentiment.

Share CFDs

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Higher volatility

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Often move over 5% when news is released

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Influenced by company-specific news

Index CFDs

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Lower volatility

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Seldom move more than 1 or 2 percent

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Influenced by market and economic sentiment

To begin trading share CFDs, open an account with EightCap today.

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Fund account with as little as $100 and start trading the global markets.

 

 

 

 

 

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Risk Warning: Margin trading involves a high level of risk, and may not be suitable for all investors. You should carefully consider your objectives, financial situation, needs and level of experience before entering into any margined transactions with EightCap, and seek independent advice if necessary. Forex and CFDs are highly leveraged products which mean both gains and losses are magnified. You should only trade in these products if you fully understand the risks involved and can afford losses without adversely affecting your lifestyle (including the risk of losing substantially more than your initial investment). A Product Disclosure Statement (PDS) and a Financial Services Guide (FSG) for our products are available to download from our Legal Documentation page. You must assess and consider them carefully before making any decision about using our products or services.

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The information on this website is of a general nature only and is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. EightCap is not a financial adviser, and does not issue advice, recommendations, or opinion in relation to acquiring, holding or disposing of a margined transaction. We provide general advice only and accordingly you should consider how appropriate the advice (if any) is to your objectives, financial situation and needs before acting on the advice.