# Share Trading Can be Volatile and Lucrative

Share trading, allows you to narrowly define your view, and take a position in an individual stock, as opposed to a more broad-based index.  When you invest in shares, the risk is limited to the change in the price of an individual stock, where the upside or downside can be significant if there is an impetus that will drive the stock price. In addition to global macro events, or sector events, stock prices are also driven by earnings releases that occur once a quarter.

For example, let’s say you purchase 10 shares of Apple stock at $160 per share. Your stock broker will require you to post$1,600 to purchase 10 shares.  Once you own the shares, they will allow you to use those shares as collateral and lend you $800 to purchase more shares of Apple or other shares of another stock. CFD Share Trading When you purchase shares with a forex broker you are purchasing a CFD, or contract for differences. The contract is for the difference in the price between when you purchase the contract (or sold it), and were you sold the contract (or bought it). You are only on the line for the difference in the price, and therefore do not need to post all the capital required to purchase the shares. In many instances, the leverage can be a large as 200-1. This means since you are not buying the shares, your forex broker will allow you to borrow$200 for every dollar posted.