CFD Returns
What is meant by return investing? Return investing is quickly associated with CFD investing . But what is CFD investing? It is no wonder that everyone would like a return of 20%. In this article we will discuss CFD investing in detail.
Yield explanation
In order to delve deeper into return investing, we will first look at the concept itself. Because what does return actually mean? The return is the percentage that arises when you divide the profit of your investment by the deposit and multiply this by 100%. For example, if you have made a profit of €100 with a deposit of €500, the return is 100/500 x 100% = 20%. The return is also an indication of how well you are investing!
Below we explain a clear and easy-to-use investment method that will help you move forward with your investments.
Investing profitably with CFDs
As previously stated, CFD trading uses leverage . This leverage ensures that you can invest with more money. Your deposit is multiplied by a certain factor in this way. With a deposit of 100 euros, you can invest an amount of 2,000 euros in a CFD position. This allows you to book a high return with a small price increase. Investing with small amounts is therefore very interesting with this program. You do not always have to invest a mountain of money to still book a lot of profit. Investing with little money is ultimately very possible with this program.
It can give you a higher return, but this does not always have to be the case. We cannot guarantee that you will ultimately make a profit. The program works so simply and quickly that a nice and quick profit is fortunately possible. Nevertheless, there is always a risk involved.
The difference between traditional investing and CFD investing is explained below using an example.
Traditional investing versus CFD investing
Let’s say you plan to invest €250 in Vodafone. The price has risen by 10%. We’re going to look at how much profit you would make through traditional investing and how much profit you would make through CFD investing.
Traditional investing
You bought €250 worth of shares. You expected the price to rise, and that is what happened. The shares become 10% more valuable. If you were to sell your shares at that moment, you would make €25 profit. Your return is 10%.
Suppose you don’t really think €25 is a lot of money, you can invest in another way with the aim of more profit. Then we come to investing via CFD.
CFD trading
You have invested the same amount of €250 in Vodafone shares. As previously indicated, CFD trading uses leverage. The deposit of €250 is therefore worth €2500, because the leverage is 10. As with traditional investing, a price increase of 10% occurs here. However, instead of €25, with CFD trading you book a profit of €250 (10% of €2500). That is a much higher return. Of course, the risks of this are also higher if the opposite happens.
Compare brokers and start trading CFDs
Are you excited about investing in CFDs after reading this article? Compare CFD brokers and find the broker that suits you best!