What are CFDs?

CFDs (Contract for Difference) allow you to gain exposure to a wide range of markets without physically purchasing the underlying instrument. You 'buy' an instrument if you think its price is set to rise, or 'sell' if you think it will fall. Because CFDs are bespoke contracts, you can enjoy instant executions and trade in and out of markets as often as you wish. CFD positions do not result in physical ownership of the underlying instruments.

As your position gives you exposure to the underlying markets, all price movements and relevant corporate actions (dividends, stock splits, buy backs), if applicable, will be reflected accordingly, however.

Benefits of trading CFDs with us

• No stamp duty to pay^†
• Go long or short easily and profit from both rising and falling markets
• Versatility & flexibility - trade in fractions of a whole contract
• High leverage
• Offset losses against your tax liability
• Trade a variety of products on one account, including indices, single equities, commodities, interest rates, bonds and FX

^† It should be noted that tax treatment depends on your individual circumstances and may be subject to change in the future. Please note that whilst we have listed the benefits above, we would also like to draw your attention to our risk warning below.

Example: Selling Bank Of America

It is now early October and the quote for Bank of America is 13.19 / 13.22 US dollars. You think the share price will decline and decide to sell £10/per point at 13.19 as a CFD position. Our intuitive deal ticket shows that your position is equivalent to 1,393.1 shares.

A week later, fear of a severe recession has driven the share price lower, and our quote for Bank Of America has dropped to 11.20 / 11.23. You decide to take your profit and close your position by buying £10/point at 11.23.

You have just made a profit of £10 x (13.19 - 11.23) = £1,960
(In this example per unit is equal to $0.01.)