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EOS CFD – Full Guide
With the growth of cryptocurrencies, the blockchain technology has gained a lot of popularity in recent times. Almost every trade wants to ultimately be part of this great innovation. This is evident in the rate at which new companies are switching to ICO instead of the normal and traditionally known IPO.
Since the idea of the whole Blockchain technology is often daunting and complicated for most traders who are not technologically inclined, the idea of a Cryptocurrency CFDs might just be the perfect solution for them.
A Contract of Difference as the name suggests is a form of an agreement made between a broker and a trader on the likely direction of a particular trading Instrument. Rather than learn how Mining works or having to deal with exchanges and coin storage, you can easily just place a trade on the likely directions, you think a particular coin is going to take without the stress attached to owning a Cryptocurrency wallet.
Since Cryptocurrency is just gaining an audience with the not so technically inclined group of investors, CFDs brokers tend to stick to the top performing coins and those with larger popularity index. Example of such Cryptocurrency coin CFDs is EOS.
What is EOS CFD?
When talking about powerful blockchain platforms for decentralized applications, you cannot but make mention of EOS. EOS, similar to Ethereum is a blockchain based decentralized operating system that supports (enables the development, hosting and execution) decentralized applications (dApps). The EOSIO is the operating system of the EOS blockchain network and the cryptocurrency of the EOS blockchain network is the EOS token.
Purchasing an EOS contract for difference means you are betting on whether the price or value of the EOS token will rise or fall at a particular time, instead of buying the EOS token itself, you are buying the contract (CFD). In actual sense, you do not own the EOS token, and whether you lose or profit totally depends on whether your prediction turns out to be right or wrong. A wrong prediction leads to the loss of your money and a right prediction leads to profit.
The perennial advice for traders especially newbies is that you should only invest money you are prepared to lose. However, there is an option called the stop loss order where you can place an automated order on when to cut your losses to avoid further losses on CFD trading. Because of the scalability improvements and generally positive reviews, the price is speculated to keep going up which is the reason why more and more investors are attracted to it.
Also, another interesting thing about EOS CFD is the option of a multiplier otherwise known as leverage. The leverage is provided by the CFD broker. It allows you to profit more but you also run the risk of losing more too. The higher the leverage effected when your prediction is right, the more you profit and the higher the leverage effected should your prediction turns out to be wrong, the more you lose, you could end up even losing more than the amount deposited.
How an EOS CFD Works?
As mentioned earlier, you do not own any of the cryptocurrency you placed a contract on but bet on whether their prices will fall or not. If you as the investor think the price is going to fall, you order a sell trade and if you think the price is going to rise, you order a buy trade. To maximize profit, you engage in leverage trading. For example, if the cost of an EOS token is $10 at a cryptocurrency exchange which means you pay $10 for 1 EOS, but in EOS CFD, you only pay a fraction of the money for the equivalent of 1 EOS, this is determined by the broker.
If the broker asks for 5%, it means you only need $0.5 to trade for the value of 1 EOS token as a CFD. This percentage issued by the broker is called the margin. Now, if you have $1000 to invest in EOS, you would get 100 EOS tokens but if you invested the $1000 in EOS CFD instead, the CFDs you would receive will be worth 2000 tokens. This is equal to $20,000 worth of EOS token for $1000, going by this you would have a leverage of 20 times.
Assuming as you predicted that the price of EOS token increases. If it increases by $100 for example, you would have made a profit of $500 (100 x 5) without CFDs and with CFDs, you would have made a profit of $10,000 (100 x 100). Remember, as there could be profits, there could also be losses, should your prediction turn out to be wrong, you stand to lose the same amount you stand to gain, going by the example you could lose $10,000 which is more than the amount you originally deposited. Some brokers will charge you more than the amount deposited should in case you incur a loss they can claim their money.
How To Trade EOS CFDs?
As the investor, you need to create or open an account with EOS CFD brokers. A CFD broker is the medium between the investor and the trading platform provided by the market. The account originally comes with a leverage which is always determined by the margin set by the CFD broker. Brokers place limits on the leverage at their discretion.
Investors then need to deposit money into their account, the money could be in FIAT currencies like the Euro, Dollars, pounds etc or in cryptocurrency depending on the CFD broker. After the confirmation of your deposit, the account is funded and then as a trader, you can choose between placing a buy trade or a sell trade (EOS shorting) with or without leverage (margin trading). If your prediction is right, you make profits in cash and if wrong, you also lose your money.
The term used for betting that the price of the EOS token will fall or drop is referred to as EOS shorting.
Best EOS CFD Brokers
Plus 500 started its operations in 1980. It is a broker based in Israel established by 6 alumni of the Israeli Institute of technology. In and outside Europe, plus 500 is a top broker among its peers with access to over 2200 pairs with the inclusion of cryptocurrencies, it has brought a vast range of trading opportunities to investors whose earning potentials are unlimited. Its increase in stock price and its use by lots of investors makes it a very trustworthy broker and also it is listed on the London stock exchange. It is one of the few EOS CFD brokers that offer better trading conditions.
What cryptocurrencies it pairs
Usually paired with the United States dollar fiat currency, plus 500 allows the pairing of the following cryptocurrencies
- BTC/USD (Bitcoin)
- ETH/BTC (Ethereum / Bitcoin)
- BCH/USD (Bitcoin Cash)
- ETH/USD (Ethereum)
- NEO/USD (NEO)
- LTC/USD (Litecoin)
- XRP/USD (Ripple)
- MIOTA/USD (Iota)
- XMR/USD (Monero)
- EOS/USD (EOS)
The payment options accepted by the plus 500 CFD broker are limited to 3 services. However, the customer service can be contacted for more details in case an exception needs to be made in a special case. The payment options include:
- Debit/credit bank cards
- Bank transfer
- E-wallet: Skrill and PayPal
Does it have fees?
Yes, plus 500 has fees, 3 different fees.
- The first fee is charged as the difference in price between the sell and buy price of the pairs to be traded. It is referred to as the spread rate.
- The second fee is usually charged on the long trades but not the short trades. It is the overnight commission also known as the swap rate.
- The last fee is the withdrawal fee which is charged on the fifth withdrawal for the month, though it varies depending on the withdrawal method used.
The minimum deposit on this platform is €100 on most methods but €500 on bank transfers.
The leverage varies according to the product type. Also, it is the same for most countries with some exceptions. An example is Poland where the maximum leverage level is 1:100. Products and their maximum leverage include:
- Indices: 300
- Forex: 300
- Options: 5
- Commodities: 152
- Cryptocurrencies: 5
Plus 500 has both the desktop trading platform and the mobile platform without the need of downloading additional software for crypto trading. The trading platform comes with price alerts which tell you that your profit has hit certain level asides from the close profit order and stop order on losses.
This is an index, currency and commodities trading platform launched in 2007 by David ring, Ronen and Yoni Assia. The platform was established to accommodate all levels of traders from the inexperienced to the experienced. The headquarters is in Cyprus and branch offices in Canada Israel and the United Kingdom has made it attract over 5 million users. eToro is well trusted and has developed a very good reputation for itself. Trading conditions are generally great using this broker.
What cryptocurrencies it pairs
Just like plus500, Etoro pairs the following cryptocurrencies with the United States dollar
E-Wallet: PayPal, web money, Skrill, and Neteller
Credit and debit card
Does it have fees?
Yes, it does have fees. They include:
- Withdrawal fees: there is a $25 charge on every withdrawal with the minimum withdrawal being $50. It is advisable to withdraw a large amount at once to minimize charges on each withdrawal.
- Overnight commission which is charged on long trades
- Spread, which is responsible for the running costs of the network, it is charged when traders close their positions
- The inactive fee which is charged when traders have been inactive for more than 12 months. The fee for this is $5
The minimum deposit on this trading platform is $500.
Etoro has leverages on cryptocurrency trading of up to 400. This has made CFD **crypto trading** more affordable and secure.
Etoro has both the desktop trading platform and the mobile platform. There is an online Etoro application downloadable to your mobile phone. Real-time feeds of trades taking place are available on the mobile application.
Bonuses and promotions
The popular investors’ program is developed by the network to allow traders to earn additional income by letting other traders copy their trade. This is up to 2% of the annual assets under their management portfolio.
Avatrade, based in Dublin Ireland was established in 2006 by a team of traders headed by Emmanuel kronitz and Negev Shekel Nosatzki. The aim of this platform is to offer trading services for bitcoin, equities, commodities, market indices, bonds and ETFs. With over 200,000 accounts registered on the network, there is diversity in trading platforms provided by avatrade which has made a whole lot of services and products available to clients.
What cryptocurrencies it pairs
Avatrade supports up to 8 different types of cryptocurrencies crossed with 3 different fiat currencies including the dollar, Euro and Yen.
The payment options accepted by Avatrade include:
- Bank transfers
- Debit and credit cards
- E-wallets: Neteller, PayPal
Does it have fees?
Yes it does too, they include;
- Overnight commission, this is charged when the trader doesn’t close before the next trading Day, hence overnight commission or swap rate.
- Spread rate, which is the difference between the buy and sell price of a trading pair. It is usually set by the broker.
The minimum deposit amount allowed on this platform is $100 but for a premium account, it is $250.
Avatrade offers a very high leverage but it varies depending on the underlying instrument whose CFD is being traded. They include:
- Cryptocurrency: 1:20
- Forex: 1:400
- Stock: 1:20
- Commodities: 1:33
This network offers both desktop trading platform and the mobile platform supported by Android and IOS. Clients can choose between AvatradeACT and MetaTrader platform. Also, there is the automated trader platform especially for beginners which helpthem mirror trades by established and experienced traders
Avatrade bonuses and promotions
There’s a welcome bonus for sign up ranging from $100 to $10,000 depending on the amount deposited. There is also a referral bonus ranging from $75 to $400 for every referral made by clients.
There is a date for future contracts for when they mature. Avatrade swaps the old mature contracts with a new one before it expires and adjusts the price difference between two contracts that are underlying.
Advantages of EOS CFDs
Traders with low capital interested in making a high trade or stake makes use of a leveraged trading. This enables traders of all financial backgrounds to participate in trading EOS CFDs. The high leverage also permits the traders to make more profits with a little stake.
Take advantage of EOS volatility
As we all know that cryptocurrency is subject to high price fluctuations, traders can easily capitalize on EOS token volatility to trade CFDs and make profits.
Get paid in your native currency
Since most traders would want trading CFDs to be in their region and also CFD brokers are trying to expand their horizon, there is a high possibility that very soon more and more traders would get paid in their native currencies.
EOS CFDs are good for people that know nothing about EOS
If you know nothing about EOS, it’s still possible to trade EOS CFDs. First, you’re not buying EOS token itself, you’re just buying a contract. Also, there is the option of using an automated trader and profit or loss signals which makes EOS CFD trading easy for just about anybody interested.
EOS CFD trading saves traders and investors the stress of having to create a wallet, securing private keys and exchanging crypto for fiat currencies including finding a buyer. All you have to do is open an account, deposit and start trading in no time.
Disadvantages of EOS CFDs
CFD industry is not highly regulated
There are lots of CFD brokers out there; most of them are known as scam brokers because the industry is not highly regulated. You should always make sure to verify the authenticity of the CFD broker you’re trying to do business with before jumping on it.
Risky and Can lead to Loss of funds
Your capital is at risk! The trading market is generally risky and you should know there is always a possibility of losing your money. But there is a greater possibility in the CFD market because of the presence of margin of leverage where you can actually lose more than you deposited.
In a Nutshell
Trading CFDs with EOS is one of the best options when it comes to cryptocurrency trading as there is the opportunity to trade big for an underlying asset with very little capital. CFD trading is available to all levels of traders ranging from beginners to experts. Traders can participate in sharing huge profits as well as losing big, even more than the amount deposited. So traders should think carefully before pouring money into CFD trading, also traders should be careful in choosing an EOS CFD broker.
Thank you for reading our piece on EOS CFDs. Visit our site for more interesting articles like this!