New and exciting, cryptos present traders with massive levels of opportunity and risk.
At FOREX.com, rather than buy cryptocurrencies on an exchange, you can trade cryptocurrency CFDs which enables you to speculate on the price without ever actually owning it.
Reasons to trade crypto CFDs
Go long or short*
Crypto CFDs enable you to profit from both rising and falling prices:
- You can go long, meaning that you buy cryptos in the expectation that they will rise in price
- On some cryptos you can go short, meaning that you ‘sell’ cryptos in the expectation that the price will fall.
Shorting a crypto enables you profit when the price decreases in value. This is not possible when you buy actual cryptocurrencies.
It is also worth noting that shorting can be used to hedge any exposure you have.
*Please note that shorting/selling is only available on some cryptocurrencies.
Read more about CFDs
Trade 24/5
At FOREX.com, you can trade cryptos 24 hours a day, 5 days a week from 5pm Sunday to 5pm Friday GMT.
Leverage
Leverage lowers the cost barriers to trade cryptos. It enables you to put up a fraction of the deposit to access a much larger trade size.
At FOREX.com, our crypto margin requirements start from 50%. This means that to trade 1 unit of a cryptocurrency, you only need 50% of the value of that unit to take a position.
Leverage can magnify your profits, but it can also magnify your losses. This is a critical trading concept to understand.
Read more on leverage
Volatility
Cryptos can experience massive changes in price over a short period of time. It is not unheard of for Bitcoin to experience a 10% swing over a weekend.
This presents traders with big opportunities and risks in equal measure.
No wallets
By trading crypto CFDs, you don’t have to deal with cumbersome digital wallets and setting up additional accounts – all of which is required when you buy cryptos for real.
Risk management tools
If you buy cryptos on an exchange then you have to constantly monitor the price.
If you trade using crypto CFDs at FOREX.com, you can use tools like stops and limits to ensure you’re not caught out by any adverse market movements.
Ready to start trading? See How to trade cryptocurrencies
Cryptocurrency Trading:
Cryptocurrency CFDs are complex, extremely risky and usually highly speculative. Trading in Cryptocurrency CFDs involves a high risk of loss of funds over a short period of time due to high market volatility, execution issues and industry-specific disruptive events, including, but not limited to, discontinuation, regulatory bans and other malicious actors within cryptocurrency ecosystems. The pricing of Cryptocurrency CFDs might be derived from specific cryptocurrency exchanges, which means that the market depth is limited to what is available in the order books of such exchanges. These markets are relatively new and thus might be volatile and limited in terms of liquidity. The pricing engines of cryptocurrency exchanges may experience delays and/or interruptions which can be caused by numerous potential issues. Cryptocurrency CFD trading is not appropriate for all investors and therefore, any person wishing to trade in Cryptocurrency CFDs should have detailed and updated knowledge and expertise in these specific products. Clients should always be fully aware and understand the specific characteristics and risks related to these products as laid down in this section.