Forex refers to Foreign Exchange Trading, Interbank Trading, or Spot Trading in major currency pairs and crosses on margin. At PFG Markets, we offer Forex Trading in the most competitive way and also provide online trading of both Gold and Silver – commission-free, with low margin requirements and free, easy-to-use trading software.
A “CFD,” or “Contract for Difference,” was developed to give clients all the benefits of owning a stock without physically owning the stock itself. For example, instead of purchasing 1,000 shares of Microsoft from a stockbroker, a client could buy 10 lots of Microsoft on our trading platform. A $10 per share increase in Microsoft’s price would result in a $10,000 profit for the client, just as if they had purchased the actual shares traded on the exchange. The major difference is that there are no exchange fees, and many inefficiencies associated with trading the underlying shares on the exchange are eliminated. CFDs have grown significantly in popularity over the past few years, and we believe this will increasingly become the preferred method of trading the financial markets.
Another key benefit of trading CFDs is that clients can trade on margin. This allows clients to trade a full portfolio of shares, indices, or commodities without tying up large amounts of capital. For example, a client purchasing $50,000 worth of CFD shares would only need to provide a $500 margin.