Trading involves speculating on the price movement of an underlying asset without owning it. In summary, trading is simply about predicting whether the price of a financial asset will go up or down.
You can trade on hundreds of financial markets, including stocks, Forex, commodities, indices, bonds, and much more. We offer over 13,000 CFD markets for you to speculate on: Meta stocks, US dollar against British pound, crude oil, and FTSE 100.
When you trade, you use a platform like ours to access these markets and take a position on whether their prices will rise or fall. If your prediction is correct, you will make a profit. If it is incorrect, you will incur a loss.
The financial instruments used to trade the price fluctuations of an asset are called "derivative products." This simply means that the price of the instrument is "derived" from the price of the underlying asset, such as a stock or an ounce of gold. The value of the derivative product changes based on the price of the underlying asset.
To understand this, let's take an example of stock speculation. If the price of a stock goes from $100 to $105, the value of the derivative product will increase by the same amount. If you bought the derivative product at $100, you can now sell it for $105. Even though you never actually own the stock itself, your profit or loss will reflect the change in its price.