Trading Monero with CFDs

Cryptocurrency trading includes not only the most important names but also some of the most interesting and emerging ones. Among them that made its way is Monero, a cryptocurrency with some special features that we will discuss in this article. In addition to discovering what Monero is, you will also learn how to trade with Monero online by using the trading platforms provided by the most popular online brokers.

What is Monero?

The Monero logoMonero is a cryptocurrency in circulation since 2014 that was created with the purpose of offering its traders advantages like privacy, decentralization, and scalability.

As far as the first two points are concerned, which is privacy and decentralization, there is no particular novelty compared to most cryptocurrencies that usually guarantee anonymity and are not issued by a central institution (thus making them decentralized).

As far as scalability is concerned, the situation becomes more interesting. Scalability is defined as the ability of a system to increase or decrease in scale depending on the factors of necessity and availability.

Monero’s primary difference as compared to many other competitors derived from Bitcoin is provided by the CryptoNote protocol on which it is based and by the significant algorithmic differences regarding Blockchain obfuscation. In a nutshell, it offers more sophisticated and in some ways, better protection.

The CryptoNote protocol and the sophisticated obfuscation process made Monero so famous that in 2017, it became the sixth most traded cryptocurrency with a capital of over 600 million dollars.

How to trade with Monero

Regardless of whether you are interested in buying Monero to invest in or use this cryptocurrency as a payment method, you may also want to consider trading with Monero online.

Trading with Monero allows you to produce economic results based on changes in its market prices. In fact, as is the case for the most important cryptocurrencies, Monero has a counter value in dollars.

Based on the rise or fall forecasts, you can trade CFDs, particularly financial instruments that allow you to produce economic results (profits or losses) depending on whether your forecasts are correct.

What are Monero CFDs?

Monero CFDsA CFD (Contract for Difference) is a financial instrument that replicates the performance of another financial instrument known as an underlying asset or simply an asset.

A Monero CFD, therefore, replicates the performance of the Monero’s quotation on the market.

That said, when trading with Monero CFDs, you trade with CFDs, not Monero. However, the CFD follows its price and allows you to get results in proportion to the increases and decreases of the cryptocurrency

You can open an upward or downward position depending on whether the value is expected to rise or fall.

But what does it mean to open a position?

Opening a trading position means acquiring “Buy” (also called “Long”) or “Sell” (also called “Short”) CFDs.

This is how they differ:

  • Long or Buy Position: opens when you expect a rise in prices and then you want to achieve positive economic results in proportion to the rise in price.
  • Short or Sell Position: opens when you expect a fall in prices and then you want to obtain positive economic results in proportion to the fall in price.

Let’s take an example to make everything clearer.

After reading the market analysis or a good and convincing article about a forecast of the Monero, I would like to cultivate the idea that Monero in the coming days will rise in value overall.

Considering the forecasts, I could open a Purchase (Long) position, that is to say, to the rise.

  • If the forecasts turned out to be correct and the value of Monero rose, I would get a profit proportional to the upward changes produced from the moment the position was opened.
  • If, on the other hand, the forecasts turned out to be wrong and Monero’s value fell, I would suffer a loss proportional to the downward changes produced from the moment the position was opened.

How to trade with Monero on Plus500

An important platform on which you can trade with Monero is Plus500, which is provided by the homonymous broker Plus500. On Plus500, there is a good selection of cryptocurrencies that includes the most important ones from a capital point of view.

Among the main advantages of Plus500 are its ease of use and clarity.

These two advantages are not to be underestimated as it is also possible to practice for free without making a deposit. Practicing with the demo is always available, even if you start to trade with real money (real account). The demo account and the real account are, in fact, separated and you can switch from one to another with a simple click.

To open a trading position on Monero on Plus500, just select Monero from the category called Crypto (displayed in the left column as shown in the figure).

Clicking Cryptocurrencies successively will also allow you to see the list of Cryptocurrencies in the main box on the right. As you may observe, on the same line of Monero, in the main pane are “Sell” or “Buy” buttons with which you can open upward or downward positions depending on your price forecast.

When you click the Buy or Sell buttons, a window opens where you can set the details of the position being opened.

Let’s analyze the details that can be modified by the user:

  • The amount of Monero to trade (notional value): in this box, you can directly input a share of your choice or use the + and – keys. In addition to the amount, the amount of margin required will also be displayed (the explanation follows)
  • Margin required: be careful as this is the actual amount of capital for which you are exposed in the transaction. It is important to note that CFDs are leveraged instruments. This mechanism allows you to use very small amounts of money compared to those required for traditional investment. In the case of trading with Monero on Plus500, for example, the leverage is 1:10. So with a €100 initial margin, you can trade with a total value of €1000 Monero.
  • Stop Loss: with the Stop Loss (you can tick the box and define a percentage), you order the platform to automatically close the position if the transaction reaches a certain level of loss percentage. Stop Loss is important because it allows you to put a maximum limit on losses based on the transaction.
  • Stop Limit: this mechanism is equal to the stop loss but the opposite because it allows you to set a maximum profit level and automatically close the position once you have reached it and thus “saving” the profit. In other platforms, it can be present along with the “Take Profit” feature, thus making it easier to remember and more logical.
  • Operating stop: this is an order found on a few platforms and allows you to order the platform to automatically update the level of the stop loss in case the market moves in favor of its prediction. You can access this type of order by clicking “advanced” in the order settings window.
  • Buy only when the rate is: is an order that is very useful both when you want to “enter” the market only when the quote reaches a certain level or when you want to place an order for the next trading day.                                                                Please note that the box associated with this feature may already be checked and cannot be changed. If this were to happen, don’t worry because it simply means that the market is temporarily closed and that you cannot open a position immediately. In this case, you can only issue an order to buy (or sell).

Once you have finished setting up the orders, you can open the position by clicking the “Buy” or “Sell” button. Once the position is opened, it will start to affect the available capital immediately.

In this regard, you should remember this small but very important detail:

when you open a position, the profit/loss counter (prof/per) will always start with a  negative value. It doesn’t depend on your forecast so avoid saying “I knew it…”. This is absolutely normal because when the position is opened, the broker retains a percentage from the spread, which is a small amount that the broker keeps as compensation for its service of providing CFDs.

When you close the position, however, it will no longer affect the available capital. At the close of a trading position, the maintenance margin is returned to the user along with the initial net margin of profits and losses.

Monero on IQ Option (CFD)

Another broker that Monero has along with other tradable cryptocurrencies is IQ Option. This broker also offers CFDs and has also placed Monero on the list of assets for trading.

What makes IQ Option’s Monero CFDs unique?

At the moment, the most important difference between Monero CFDs of IQ Option and those offered by Plus500 is the lack of leverage in those who were issued by IQ Option.

Let’s move on to practice. How do I trade with Monero on IQ Option?

To trade with Monero on IQ Option, just click the “+” button at the top to open the list of tradable instruments including cryptocurrencies. By clicking “Crypto”, you can access the list of cryptocurrencies from which you can easily select Monero.

After selecting Monero, you proceed by setting the amount to be invested in the transaction in the right of the display. Finally, just click “buy” or “sell”.

Based on your forecasts and market analysis and as far as the limits dictated by the conditions set by IQ Option, you can close the trading position when you wish to do so and get the corresponding economic result. By closing the position, you can recover the amount based on the new exchange rate between dollars (USD) and IQ Option’s Monero CFDs and the country’s net of profits and losses.


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