Is it a good trading strategy to invest in ETFs via a CFD trade?
Asked 4 years ago
Hello all, I'm based in Switzerland, and Etoro has recently stopped allowing the direct purchase of US-based ETFs. This leaves me with one option: to invest in these as a CFD. What are your thoughts on buying ETFs as a CFD? Sorry long post, but I'm interested to hear thoughts on the pros and cons of ETF investing via a CFD trade.
Andrew Moran
Tuesday, October 26, 2021
Contract for Differences (CFDs) are great if you want to invest in price movements of stocks, commodities, and cryptocurrencies without directly owning these investments.
If you were not located in Switzerland and based in the United States, it would make sense to directly purchase these exchange-traded funds (ETFs). But, since you are overseas, and you are certain you want to own U.S.-based ETFs, you should move ahead with CFDs.
U.S. financial markets are one of a kind because of how liquid they are and how much possibility there is to generate strong returns. The options are astronomical, from using a Gold ETF as a trading strategy to holding onto index funds for your retirement needs.
That said, you should be aware that your initial position will immediately fall because of the size of the spread when you open the CFD.
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