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Cryptocurrency CFDs

Cryptocurrencies have grown in popularity over the last few years. The original and most well-known is bitcoin, which was launched in 2009 but there are now a number of competitor digital currencies that can be traded.

Cryptocurrencies operate independently of banks and governments but can still be exchanged or traded like traditional fiat currencies. They are based on blockchain technology, which is open source and peer-to-peer, so there is no need for intermediaries for transactions. Bitcoins are created through mining with an agreement that there will be a finite supply of 21 million.

How can I trade Cryptocurrencies via a CFD?

Normally, cryptocurrencies are traded via exchange, and require a ‘virtual wallet’ to hold them. ADS Securities’ clients can trade Cryptocurrencies via a CFD without taking ownership of the actual underlying Cryptocurrency.

Simply log into the ADS Securities trading platform to access our Cryptocurrencies which will be quoted against the USD. When you open a CFD position, rather than taking actual ownership of the Cryptocurrencies, you will trade on whether the price of the Cryptocurrency will rise or fall in value in relation to the US dollar. As with any CFD if you are correct, you will profit; if you are not, you will make a loss.

Trading Cryptocurrencies with ADS Securities

The advantages of trading a Cryptocurrency CFD with ADS Securities:

  • Trade on leverage, with margins starting from 25%
  • Flexibility on trade size – minimum 1 CFD equals 1 unit of the Cryptocurrency
  • Go long or short – capitalize on uptrends or downtrends in price
  • Pricing available to all clients on our trading platform
  • Simple account opening & funding process
  • Customer service 24 hours a day, 6 days a week

Bitcoin CFD example

If you are interested in trading bitcoin via a CFD, the following examples will help explain how it works. If the selling price is $11,500 and the buying price is $11,550 for 1 bitcoin, and you believe that the bitcoin’s price will fall against the dollar, you may decide to sell 10 bitcoin contracts at $11,500 – for ease of reference, each of our CFD contracts is equivalent to transacting in 1 bitcoin.

Scenario A

The bitcoin price falls and our new price is $11,300/$11,350. You decide to take your profit by buying at $11,350.

$11,500 – $11,350= $150 move or 150 points

Your gross profit is 10 contracts x $150 = $1,500

Scenario B

The bitcoin price rises and our new price is $11650/$11700. You decide to close your position by buying at $11,700 to limit your losses.

$11,700 – $11,500= $200 move or 200 points

Your gross loss is 10 contracts x $200 = $2,000

Cryptocurrencies, including, without limitation, Bitcoin and Ethereum, are subject to a very high degree of uncertainty and price volatility. Investors in cryptocurrency CFDs are exposed to a number of additional risks not present in more traditional investments. These risks are set out in our Cryptocurrency CFDs – Additional Risk Warnings & Conditions, you should note that this is not an exhaustive list.
All trading carries risk, and with some accounts, losses may exceed your deposit.