The stocks of the most popular German and European companies, including BMW, Adidas, Lufthansa, Bayer, Volkswagen, Siemens, LVMH, Henkel, and many others are traded on XETRA.
In order to trade CFDs on stocks successfully, a trader should first of all learn about the industry of a company the shares of which he is planning to buy or sell. The data on financial condition, liquidity, dividend payments will be useful when making a financial decision. Study financial multipliers and ratios such as P/E, ROE, P/S, DEBT/EBITDA, EV/EBITDA, P/BV to track the company's performance and the prospects of its growth. If you are planning to invest in stocks, choose companies from different industries to diversify your investment portfolio.
CFD XETRA is based on the principle of margin trading, where the investor receives income through leverage provided. This makes it possible to operate with higher amounts while only having the required deposit on the account. Thus, the LiteFinance traders are able to work with CFD XETRA stocks and earn from them without having the full amount of money to buy the relevant assets.
LiteFinance clients can use the opportunities of margin trading with CFD XETRA instruments, and make a profit in both rising and falling markets. If a stock decreases in price, then you can open a short position and make money on the difference in prices between the opening and closing value of the trade. Vice versa, if the stock is steadily rising in price, then you can make a profit by opening a long position. Moreover, LiteFinance allows its clients to put forward a margin of only 2% of the value of one share when opening a long or a short trade.
After a short or long position on shares is opened, the value of the asset may change, and when the contract is closed (i.e. when a trade is closed), the trader receives the difference between the initial price and the current price of the asset.
Let's take as an example the long trade in CFD XETRA for 300 shares of Bayer AG (#BAYN) at 27.89 USD per share. The amount of funds on the trader's account required to open such a contract would not be the full price of shares, 8367 US dollars, but only the 2% margin, which would amount to 167.34 US dollars. After a while, the share price may increase to 37.89 US dollars, and then the contract will be closed with a profit of (27.89 + 10 - 27.89) * 300 = 3000 US dollars.
The international e-trading system XETRA is owned by the biggest financial organisation in Germany, Deutsche Börse, and located in Frankfurt am Main. Trades are operated mainly in euro. The XETRA stock exchange provides an opportunity for trading American depositary receipts (ADR) or Global depositary receipts (GDR) for such companies as CitiGroup, Vodafone, China Telekom, Aeroflot, Nokia, Gazprom, Sony, or Lukoil, investing in ETFs, corporate bonds and many other financial instruments. The most important German index DAX, one of the key indicators for the German and European economies, is calculated on XETRA as well. XETRA is considered to be one of the most liquid e-trading venues of the world and takes the lead in Europe in terms of liquidity concentration.
Get access to the trading instruments of XETRA stock exchange through LiteFinance and discover the benefits of margin trading in stocks.
