CFD Trading
CFDs versus spread betting: what is the difference?
Both are leveraged derivatives that let you profit from price movement without owning the asset. A CFD is a contract settled in the currency of the instrument and is treated as a financial trade; spread betting is structured as a wager priced per point of movement and is only available in certain jurisdictions. CFDs allow offsetting of losses against gains for accounting purposes in most markets, which is why professional traders generally prefer them.
Benefits of CFDs
Go long or short
Sell first and buy back later with no borrowing arrangement, so falling markets are as tradeable as rising ones.
Capital efficiency
Margin requirements as low as 0.5% free up capital for other positions — while equally magnifying losses.
One account, many markets
Currencies, indices, shares, metals and energy all draw on the same margin pool and the same platform.
Fractional sizing
Trade from 0.01 lots, so position size can be matched precisely to your risk budget.
No ownership overhead
No custody, settlement or registrar costs, and no physical delivery on commodity contracts.
Hedging
Offset exposure in a physical portfolio without liquidating the underlying holdings.
Worked example: long 5 lots of UK 100
| Stage | Detail | Value |
|---|---|---|
| Entry | Buy 5 contracts at | 7 640.0 |
| Margin | 5% of notional | £1 910.00 |
| Exit | Sell 5 contracts at | 7 712.0 |
| Gross result | 72 points × 5 contracts | £360.00 |
| Financing | 2 nights held | −£2.14 |
| Net result | After all costs | £357.86 |
Illustrative only. An adverse 72-point move would have produced an equivalent loss.
Trade 180+ CFD instruments
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74–89% of retail investor accounts lose money when trading CFDs with this provider. Consider whether you understand how CFDs work and whether you can afford the high risk of losing your money.