How CFDs work
A contract for difference (CFD) follows the price of an asset, such as a currency pair, a metal or an index. You do not own the asset. You trade the price change.
What a CFD is
You agree a contract with your broker. Its value moves with the price of the asset.
- You can trade price rises and price falls
- If you expect a price to rise, you can buy. If you expect it to fall, you can sell. If the price moves against you, you make a loss.
- You do not own the asset
- A CFD gives you price exposure only. You do not get the currency, the metal, the shares or the barrels of oil. For crypto CFDs, you do not own any coins.
- Your result is the price change
- Your gain or loss comes from the difference between the opening price and the closing price, and it depends on the size of your position.
The five markets
- Forex: Price exposure to currency pairs. You do not own any currency.
- Metals: Price exposure to metals such as gold and silver. You do not own any metal.
- Indices: Price exposure to a stock index, which tracks a group of company shares. You do not own the shares.
- Energies: Price exposure to energy markets such as oil and gas. You do not own any oil or gas.
- Crypto CFDs: Price exposure to digital assets. You do not own any coins.
This page is general information, not personal advice. Which instruments you can trade is confirmed per account in the portal.
Leverage, margin, margin call and stop-out
Leverage lets you open a position larger than the money you put up. It increases gains and it increases losses.
- Margin
- The money your account sets aside to keep a leveraged position open. It is not a fee.
- Free margin
- The money in your account that is not set aside as margin.
- Margin call
- A warning that your equity is getting low compared with the margin your positions use.
- Stop-out
- Automatic closing of positions when your equity falls too far. It can happen quickly, and positions can close at a loss.
Losses can build quickly when you use leverage, and you can lose all the money you put into your account. The margin call and stop-out levels for each account are shown in the client portal before you open it. Understanding the risks
What trading costs
Which costs apply depends on the account and the instrument.
- Spread
- The difference between the bid price and the ask price. You pay it when you open a position.
- Commission
- A fee charged per lot on some account types.
- Swap
- A charge or a credit for keeping a position open overnight. It can go either way.
Costs reduce your result, and you pay them whether a trade makes a profit or a loss. See how pricing works for each account type. The exact conditions of each account are shown in the client portal before you open it.
Ready to open an account?
Sign up, verify your identity and review your account conditions in the portal before you trade.
Questions before you start? Visit the help centre