Bitcoin cfd trading




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Bitcoin cfd tradingBitcoin CFD brokers

Two regulated online brokers now offer Bitcoin CFDs alongside CFDs on shares, indices, commodities and foreign exchange.

Plus500 (Plus500.co. uk ) is the only FCA regulated broker that supports Bitcoin CFDs. Leverage up to 1:10 on Plus500's in-house trading platform. Open an account here and you could trade Bitcoin / USD in minutes.

AvaTrade (AvaTrade ) allows you to trade Bitcoin CFDs on MT4 on leverage up to 1:5. Open an account in minutes from just $100. AvaTrade is regulated in the European Union, Australia and Japan.

CFD trading example

Here's how you can profit from the rise in the value of Bitcoin against the US Dollar.

Let's assume you invest $100 in the Bitcoin / USD CFD when Bitcoin is trading at 118.35. If Bitcoin rises to just 118.45, you would be $100 x 0.10 = $10 better off, netting you a 10% return on your investment.

CFDs also allow you to profit in a falling market when the price of the underlying asset is going down. This is called going "short": selling the asset now with a view to buying it back later at a lower price.

How leverage works

With CFDs, you can leverage your trades to grow your earnings potential.

For example, Plus500 (Plus500.co. uk ) offers leverage up to 1:10 on the BITUSD CFD. If you were to invest $100 of your own money on 1:10 leverage, you could open a $1,000 position. If we return to the previous example, you would have been $100 better off, netting you a 100% return on your investment.

Leverage is a double-edged sword: it magnifies your gains and losses. In other words, your capital is at risk