Whats better/safer to trade for a UK based investor out of CFDs or options derivatives on stocks and which…?

I want to know in your opinion what you think is best for a UK based investor out of CFD’s, (contracts for differences) or options derivatives, i.e. puts & calls for trading stocks and which do you think is better/safer to trade and has the best chance of you succeeding when trading stocks?

Also, I am trying to choose one out of options or CFDs as I have a practice CFDs trading account with cityindex and I’ve done quite well before with CFDs and, also I am about to set up a demo options trading account with optionsxpress as it looks the most simple options broker I can find. Is options trading better than CFDs, or even similar in any way at all to CFDs if you have the right education, trading mentality etc?

Please give a good easy-to-understand answer. thanks.

Related posts:

  1. Am I better to short/long sells stocks using options with their strategies or by using CFDs? Please help/advis?
  2. Do you have to have a certain amount of cash to trade options at OptionsXpress.com?
  3. Is trading CFDs easier than trading Options and can the rewards still be huge?
  4. is it possible to trade OPTIONS to MILLIONS?
  5. So is it possible to trade options to millions?

This entry was posted on Wednesday, June 2nd, 2010 at 7:44 pm and is filed under options trading education. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “Whats better/safer to trade for a UK based investor out of CFDs or options derivatives on stocks and which…?”

  1. GibsonEssGee Says:
    June 2nd, 2010 at 8:24 pm

    Recent events have shown that no trading has an element of safety, particularly derivatives. If you think you are doing well with CFDs then stick with it. Alternatively look at futures (LIFFE) or Carbon Trading.

  2. guidfarr Says:
    June 2nd, 2010 at 9:02 pm

    Options and futures are mainly traded by Americans while CFDs are widespread elsewhere (Europe, Australia…etc) – the reason options and futures are so popular in the USA is because they are geared instruments and thereby are useful to maximise returns. CFDs don’t exist in the USA….

    I would say that CFDs are much more straightforward to trade an understand than options but they cannot really be compared. And you’re right the rewards of trading CFDs can be just as great but so is the downside if you don’t get the market direction right.

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