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CFDs
CFD Markets
Using a Financial Spreads account you can access more then 2,500 CFD markets including shares listed in the UK, America, Germany, France, South Africa, India and a range of other countries.
As well as shares, investors can take positions on the leading global stock market indices, commodities, forex, bonds and interest rates. Financial Spreads quotes Futures CFDs as well as Daily CFDs.
What are CFDs?
CFDs (Contracts For Difference) are an agreement to exchange the difference in value of a given market between the time at which the contract is opened and the time at which it is closed.
A CFD lets an investor speculate on whether they think a market is going to strengthen (go up) or weaken (go down).
If the investor is correct and the market moves in their favour, they will make a profit of 'the size of the CFD multiplied by each point that the market has moved in their favour'.
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Prices are indicative only. Thousands more prices are available when you log in.
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However, if the investor is wrong then they will make a loss of 'the size of the CFD multiplied by each point that the market has moved against them'.
With a CFD, the investor does not actually own the underlying asset that they are speculating on. A CFD is a derivative, therefore the price that Financial Spreads quotes, is derived from the underlying asset. The CFD goes up or down when the underlying asset goes up or down.
In the UK, there is no Stamp Duty* on CFD trades. This saves investors from a tax that traditional share traders must pay. In the UK, CFD trading is regulated by the Financial Conduct Authority (FCA).
CFD Account
A CFD account with FinancialSpreads.com offers many positives:
Commission-Free CFDs
The Financial Spreads CFD service is commission-free and there are no broker fees. Our charges are built into the spreads that are applied to the underlying markets.
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CFDs with Tight Spreads
When trading CFDs, one of the primary costs is the spread, i.e. the difference between the sell price and the buy price. The wider the spread, the more it costs an investor to trade.
At Financial Spreads we provide clients with some of the tightest spreads in the market.
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CFDs with Low Margins
'Margin' is the amount of capital an investor needs to have in their account in order to make a trade.
Financial Spreads offers exceptionally low margin requirements across all markets. This means investors only need to deposit a small percentage of the value of their trade in order to open a new position.
For example, if the minimum margin requirement for the UK 100 market is 30, this means for a £1 trade an investor only needs to deposit £30 into their account to open a new trade. For more details see CFD Market Information.
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24 Hour CFD Trading
Many popular markets can be traded 24 hours a day, from Sunday evening to Friday evening, including more than 30 forex pairs, UK and US indices, gold and crude oil. For more details see 24 Hour Trading.
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CFDs - Trading Ticket |
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CFD Risk Management
CFDs are high-risk, nevertheless at Financial Spreads we want investors to have a positive experience. Therefore Financial Spreads adds a mandatory/automatic Stop Loss to every trade. The Stop Loss is designed to help with Risk Management by limiting losses on losing trades.
Note that Stop Loss orders are not guaranteed and are subject to slippage. Should the market 'gap' or 'slip', then you can lose more than your initial deposit.
Having said that, investors also have the option of applying a Guaranteed Stop Loss to their trades in order to put an absolute limit on the loss of any trade. For more details see Guaranteed Stop Loss.
Whilst Stop Loss orders and Guaranteed Stop Loss orders are there to limit your losses, it is important to note that they do not limit your potential profits.
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CFD Demo Account
Investors, who are new to CFD trading or perhaps just interested in trying out the Financial Spreads CFD platform, can use the free Demo Account.
The CFD Demo Account replicates the real money platform, however, it is risk free and investors are given £10,000 in virtual funds to trade with.
The CFD Demo Account platform comes with a wide range of popular markets as well as professional level charts. For a free test, sign up at CFD Demo Account.
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CFDs vs Spread Trading
Some investors prefer CFDs and others prefer spread trading. At Financial Spreads we don't make you choose, you can invest through CFD trading and spread trading from the same account.
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CFD Charts
FinancialSpreads.com provides clients with free real-time, professional level charts for every market.
The sophisticated charts represent the Financial Spreads prices that are derived from the underlying markets.
To help with your technical analysis, the CFD charts come with Back Testing tools, email alerts, technical indicators, drawing features and a range of time views as well as a host of other features and options.
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CFD Trading with Excellent Customer Support
The Financial Spreads customer support is second to none. To speak to our knowledgeable and friendly Customer Support team please do not hesitate to call +44 (0)20 7456 7061 or email support@FinancialSpreads.com.
CFDs Platform
Financial Spreads offers a user friendly CFD trading platform. There is no need to download any software in order to access either the live trading platform or the demo account platform.
Apply for a CFD Trading and Spread Trading Account
Spread trading and CFD trading carry a high level of risk to your capital and you can lose more than your initial deposit so you should ensure spread trading and CFD trading meet your investment objectives and if necessary seek independent advice.
Index CFD Example
Speculating on the UK 100 (FTSE 100) to go up
Let's say that Financial Spreads are quoting the UK 100 CFD market at 5900 - 5901. This means that:
- If you think the stock index will fall, you can sell the market at 5900
- If you think the index will rise, you can buy the market at 5901
With the UK 100, one CFD is worth £1 per index point. In this case, you think the market will rise, so you buy one contract at 5901.
Later in the day, the market rises and so the Financial Spreads quote is updated to 5971 - 5972. At this point you decide to close your trade by selling one contract at 5971.
Closing level: 5971
Opening level: 5901
Difference: 70 points
Your P&L = 70 points x 1 contract @ £1 per point = £70 profit
Share Trading CFD Example
Speculating on the Barclays share price to increase
Let's say you think that the Barclays share price will rise and that Financial Spreads are quoting the Barclays market at 235.6p - 235.9p. In this case, you buy 1,000 Barclays CFDs, i.e. buy at 235.9p.
Let's say that during the day the Barclays shares rise quickly and our quote now stands at 254.2p - 254.5p. Therefore, you close your CFD position by selling your 1000 CFDs at 254.2p.
Your profit is calculated by multiplying the difference between the opening price and the closing price and then multiplying that figure by 1000 CFDs:
Closing level: 254.2p
Opening level: 235.9
Difference: 18.3p
Your P&L = 18.3p x 1000 CFDs = £183 profit
Of course, had the market moved in the opposite direction, you would have made a loss.
Let's say the market dropped and our quote changed to 216.5p - 216.8p. Therefore, to stop your losses getting any bigger you might decide to close your CFD position by selling at 216.5p.
Closing level: 216.5p
Opening level: 235.9p
Difference: -19.4p
Your P&L = -19.4p x 1000 CFDs = 194 loss
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.
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