What Are Shares and How Do They Work?
Trading shares with derivative products enables you to go short as well as long – giving you the potential to profit from markets that are falling in price as well as rising. This is because you don’t need to own the underlying shares to trade with derivatives.
When you trade stocks via leveraged derivatives like CFDs, you’ll only need to put down a deposit – known as margin – to receive full market exposure. This is a huge draw to trading shares, as it means less money is required upfront. But, while leverage has significant benefits, it also comes with risks because any profit or loss is calculated from the full exposure of the position, not just the margin required to open it.
