The classic ‘short’ strategy, valid in the traditional investment world is not (yet) possible in the crypto coin world. On the equity markets, investors can borrow shares or another equity from say, institutional investors, that they immediately sell on the market – to buy them back at a lower price, after the expected price fall, and then return them to the lending party. The difference between the sales and purchase price is the profit for the ‘shorties’. Or the loss, if they are wrong and the share rises instead of decreases. Which means they have to buy back the share at a higher price, to be able to give it back to the lender.
CFDs are powerful and flexible trading instruments that can be used effectively, when executing a short trading strategy. A relatively small deposit on your trading account, will allow you to easily trade a Bitcoin CFD without commissions.
Cryptocurrency CFD trading
The Plus500 trading platform is top notch and in-house developed, one of the leading platforms available in the industry today. It offers advanced research and trading tools, advanced features and requires no download. CFD trading platforms such as Plus500 have a long history of development, and have been created to enable the investor to take positions as quickly and securely as possible – and to alow for maximum impact, with leverage. As a result, a trader can gain exposure to price changes, without owning the cryptocurrency itself (long or short).
By opening a CFD position, the trader is exposed to price changes, without owning the asset at hand. Basically, it is a contract between the CFD broker and the trader – in which the difference between the opening position and the final position is settled between both parties. Hence the name: CFD, Contract For Difference. The deposit is used in the settlement, when the investor has closed his final position at a loss.
Bitcoin CFD’s offer the possibility of trading both long and short. You are able to set stop-loss, that limit your risk and mean you do not have to go ‘all-in’. According to Bloomberg Finance, CFD trading is one of the most popular ways to short Bitcoin. CFD means Contract For Difference, and represents a derivative that mirrors the movements of a certain asset – Bitcoin in this case.
Trading Bitcoin-Futures CFDs on Plus500.com:
Trade both long and short
You don’t need thousands of Dollars to start trading
Manage your risk with stop-loss, and other trading software functionalities
Margin trading: maximizing your opportunities
Free demo account, with zero deposit required