An example: Vodafone (VOD)

Say Vodafone shares have a strong week on the back of a good earnings update. After looking at a price chart for Vodafone, an investor might decide that the shares look attractive at 225p, 10p below the current level. Using a CFD trading platform she can set an order to buy in at that set price or better.

It might happen in a day. It might happen in a week or a month – it may never happen. There is no time hindrance. Likewise, if the investor is only looking to bank a 20p profit from her Vodafone position she can enter a profit-taking order that will only execute when Vodafone shares have risen by 20p. That way if her position reaches her objective, she can be confident that the trading platform will automatically crystallise her profits at the pre-determined level, even while she is tied up in that important meeting.

Furthermore, to mitigate risk she can set a get-out level (known as a stop-loss) that will close the position at a level that would, if the trade went wrong, prevent losses exceeding what she is comfortable with. If she took out a £20K position in VOD with a CFD, risking £1,000 in the hope of booking profits of £2,500, she can use the platform to make sure that losses never exceed £1,000 and that profits of £2,500 are booked as soon as they are reached.

Being able to set up every parameter of a trade – entry, stop loss & profit limit – out of hours saves you having to monitor your positions. It frees you up to run your business whilst still being able to pursue your goals of generating additional returns from the stock markets. We will provide all the information you need to take a view by highlighting and analysing coming events in advance.