CFDs

CFDs – a flexible way to trade on thousands of markets

Contracts for Difference can be used to deal on the price movements of a variety of investments, including shares, indices, sectors, currencies and commodities, without actually owning the underlying investment.

A contract is held between you and a CFD provider (in our instance IG Markets) whereby one party pays the other the difference between the current value of an asset and its value at the start of the contract.

The aim is to profit from the price moving in your favour.

CFDs are traded in a similar way to ordinary shares as the price is based upon the market price.

When you open a CFD contract, you do not have to pay for the full value of the deal. Instead you put up a deposit, e.g. 5%, which means you can trade up to 20 times your initial capital, this is often called 'Margin' trading.

What are the advantages of CFDs?

You don't have to pay the full cost of the deal upfront when trading CFDs
You can profit from falling or rising markets by trading long or short
CFDs are currently exempt from UK Stamp Duty
You have access to a range of investment choice
No dealing commission on indices, currency and commodity CFDs
Low dealing commission on equity CFDs

CFD Trading

For CFD trading we will introduce you to 'CFD Trader', a trading name of IG Markets.

IG Markets provides one of the most comprehensive dealing platforms, unrivalled research, and outstanding client service.

Important considerations when CFD trading

When considering trading CFDs it is important you understand that as a margined product, it can carry a high level of risk to your capital. It is possible to quickly lose more money than your initial deposit and you may be required to make further deposits at short notice. CFD trading is not for everyone.

You must understand the risks before you open an account and trade in CFDs by reading the terms and conditions, risk warnings and by completing the appropriateness assessment as part of your account application.

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