What is Online Trading

Online trading generally refers to any financial trading activity that is carried out over the internet. In order to get access to financial markets, you need a broker or some sort of intermediary to establish the connection to the specific financial market you wish to trade on.
Initially stock markets were the most popular places for online financial trading. There are additional international financial markets, which have become increasingly interesting for the private investor since financial platforms made them accessible.
Online trading platforms offer a variety of investment possibilities, other than the simple act of buying an asset and selling it at a later point at a higher price. Here at Jones Mutual, we focus on a specific type of trading, which is relevant for a large number of markets and assets. It is also one of the most popular instruments in the online trading world today. We are talking about Contracts For Difference, in short s, for which the Jones Mutual team are experts.

What is a Contract For Difference?

Contracts For Difference are what is called a financial derivative. This means, it is a tool for investing, which derives from the traditional investment techniques we mentioned before. In plain English, you don’t need to purchase a certain asset to invest in it, or profit from its value. If that sounds pretty neat to you, then you are right.
A is a contract made between the investor and the intermediary allowing you to profit from a change in the value of a specific asset. s can be issued on stock prices and indices, but also on foreign currency exchange and even on commodities, such as oil, gold, wheat, etc.

How Does a work?

It's very simple. You choose an asset of which you expect a change in price and an amount you wish to invest. Let's say market experts predict the price of oil to rise in the upcoming days, and you decide to invest $1000. By clicking on “buy” you enter a Contract For Difference. If the price indeed rises by, let's say $100, you can exit the contract by clicking on “sell” and will have earned $100 (minus a small fee the broker deducts). This is called a ‘long’ contract, or a ‘long’ position.
Here's another example: You read that analysts are expecting the rate for the DAX stock index to go down. In this case, you can invest your $1000 in a ‘short’ contract by clicking on “sell.” Now you will profit from the decrease in value. To exit you simply click “buy.”
Keep in mind that in both cases the amount of your profit also depends on the level of leverage. Find out more details in the and our.

Assets to Invest In

There are five major categories of assets that you can invest in. At Jones Mutual, we offer all of them. Basically, anything that is traded on international markets at a price set by the market’s supply and demand counts as an asset.

  • Commodities
    Let's start with the simplest one to understand, the commodities. These are raw materials and goods traded on the international market. Commodities include precious metals, such as gold and silver, fossilized raw materials, such as oil and gas and food products, such as rice, wheat, coffee beans, etc.

  • Stocks
    s can be issued for stocks and stock indices. Stocks are shares a company sells at the stock market. By buying such shares, the shareholder owns a fraction of the companies’ value. Stocks are usually sold and traded at regional stock exchanges. The biggest is in the USA, Japan, England, and China.

  • Indices
    Most stock exchanges have an index, in which a number of large stocks representative of the market are calculated into a numeric rate. This is an indicator of the markets overall value. An investor, who does not want to put his money in a single stock may invest in an index comprising of a list of stocks, which is less risky.

  • Currency
    An attractive asset for investment is currencies. Typically an investor would buy a foreign currency with the currency he owns and sells it either for another currency or his own currency when the value shifts. As a s investor, you can choose any two currencies without owning either of them and profit from the changing value.

  • Find out more on the Trading Assets page.

    Advantages of Investing in Contracts For Difference

    We will point out three main benefits to trading s here, but that’s not all there is to it. First and foremost the required investment is relatively small compared to conventional trading on financial markets. Consequently, the potential profit is much higher. You do not buy an asset at its full value, but enter a contract on a smaller amount. At the same time, the amount of profit is the same as if you had bought the asset.
    Secondly, you can profit from an increase in price and from a decrease. This is not possible when buying an asset. All it takes for a to be profitable is to predict the correct direction the asset-price will take and then choose the associated type of contract, either long or short.
    For the traditional investor high volatility is risky and usually not beneficial. An experienced s investor, on the other hand, can turn volatility into an advantage. By frequently buying and selling a variety of contracts on a variety of assets, one can maximize profits on rising and falling asset-rates. This requires, of course, a lot of dedication and intensive follow-up on market developments.

    Risks Involved in s Trading

    Wherever there is high-profit potential, there is also high risk involved. In s trading, there are a number of risk factors, which anyone investing money should be aware of. Keep in mind, that whatever you can earn in a single contract, you may also lose, if the price takes the opposite direction of what you predicted.
    In addition, it is easy to lose control over too many contracts, when trading s very actively and frequently. Make sure you understand what it means to trade with leverage and always keep your initial margin in mind.
    We, therefore, urge all our customers to use all the professional material offered here on the site to get a good understanding of trading theories and practices. Make sure, you keep yourself informed about market trends and invest in markets that are easy for you to understand.

    Why Choose Jones Mutual?

    Jones Mutual offers you the highest standard of technology available today. For you, this means two things: first off, the interface is set-up for your convenience as an investor. Based on the way users navigate around the site, the information they seek and the actions they carry out we assembled the features.
    Secondly, the data at Jones Mutual is accurate and reliable and displayed coherently. You will find the most comprehensive list of graphs, statistics and additional data with live updates to give you the best information needed to trade s smart. See which are available on Jones Mutual.
    You can learn and sharpen your skills with the professional material online. But that's not all, our professional staff is available for you at all hours of the day and night. Once you sign up, you are part of a team. On a team, people look out for each other. That's our job.