CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.

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Always trade with you, never against you

EDUCATION CENTRE

ABOUT CFDS

Q:
What is a CFD?
A:
A CFD (contract for difference) is a popular form of derivative trading. CFD trading enables you to speculate on the rising or falling prices of fast-moving global financial markets, such as forex, indices, commodities, shares and treasuries.
Q:
What is CFD trading?
A:
Some of the benefits of CFD trading are that you can trade on margin, and you can go short (sell) if you think prices will go down or go long (buy) if you think prices will rise. CFDs are tax efficient in the UK, meaning there is no stamp duty to pay. Please note, tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK. You can also use CFD trades to hedge an existing physical portfolio.
Q:
What instruments can I trade?
A:
When you trade CFDs with us you can take a position on hundreds of instruments. We offer trading on major FX pairs including EUR/USD and GBP/USD. In addition, you can also trade indices and commodities.
Q:
Can I hedge using CFDs?
A:
Yes, you can use CFD trades to hedge an existing portfolio.
Q:
How does CFD trading work.
A:
With CFD trading, you don't buy or sell the underlying asset (for example a physical share, currency pair or commodity). You can make money by correctly predicting whether a given market will rise or fall. When you trade CFDs, you are agreeing to exchange the difference in the price of an asset between when you open a position and when you close it. The more the asset’s price moves in the direction you’ve predicted, the more you would profit. But the more it moves against you, the more you would lose.
Q:
What is margin and Leverage?
A:
‘Trading on margin’ with CFDs is another way to describe leveraged trading. The amount of money required to open and maintain a leveraged position is called the ‘margin’ and it represents a fraction of the position’s total size. Leverage in CFD trading is the means by which you can gain exposure to a large position without having to commit the full cost at the outset.
Q:
What are the costs of CFD trading?
A:
There is no stamp duty when trading CFDs. CFD trades on currencies, commodities, are commission free, however, trading index CFDs are subject to commission charges on opening and closing the trade. The commission charge is based on the overall value of the trade. At the end of each trading day, any positions open in your account may be subject to an 'Overnight Financing Fee'. Overnight Financing is a fee that you pay or receive to hold a trading position overnight on CFD trades that have no set expiry date. It is an interest payment to cover the cost of the leverage that you use overnight. Cash, realised profit and losses, adjustments, fees and charges that are denominated in a currency other than the base currency of your account, will be converted to the base currency of your account and a currency conversion fee will be charged to your account. In addition, from time to time we may share a proportion of our spread, commissions and other account fees with other persons including a distributor that may have introduced you.
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