Trading stocks is fundamentally different than buying stocks. When a company goes public i.e. holds an IPO (initial public offering), shares of the company are listed on a stock exchange. This way, retail and institutional investors are free to buy shares in the company and become stakeholders. This is a mutually beneficial arrangement since the company can raise capital from selling its stocks and the investors can get dividends depending on the number of shares they own and how much the value of the stock appreciates over time. If the company does well in future, the value of the shares rises making it a win-win situation for both company owners and shareholders. Trading stock online is more akin to currency trading and involves a lot of speculation.  

There are multiple benefits to investing in stocks, but it can prove to be quite a limiting experience for several reasons. Enter stock CFD trading. CFD stands for contract for difference and is essentially a contract between you and your broker to buy or sell some units of the underlying asset (in this case company shares) while paying the difference in price from the current going rate and the time of closing the trade. By offering CFDs on stocks, forex brokers have opened up the opportunities available in the online stock exchange to an even wider audience while making trading stock online a lot more favorable and accessible. 

Even though owning stocks in a well-performing company can be very lucrative, it’s mostly considered a long-term investment which will take some time to pay off. On the other hand, by trading stock online, you have the opportunity of making instant profits by speculating on future price movements. You can even speculate on the price of a company’s stock going down and make a profit if it does. This is called short selling which although is available on a traditional online stock exchange as well – it is quite challenging to do and comes with additional fees and costs.