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What are CFDs?
A contract for difference is an agreement to exchange the opening and closing price of a contract, multiplied by the volume of that contract. Unlike most traditional markets, it lets you go short in something you do not own.
Trading without owning.
CFDs are financial derivatives. They let you take a position on a price moving up or down without ever holding the underlying asset, no share certificate, no barrel of oil, no bar of gold.
They also trade on margin, which means you post only a percentage of the position’s underlying value rather than the whole amount. That significantly increases both the profit and the loss potential, which is the trade-off at the centre of the product.
Because there is no delivery, a CFD is a very flexible way to trade, above all because of the ability to sell first in a market you expect to fall.
Selling 10 CFDs in a falling market
You take a bearish view: you expect the price to fall, so you open with a sell.
You sell10 CFDs at 86.90
You buy to close10 CFDs at 86.84
Movement8690 − 8684 = 6 points
(8690 − 8684) × 10 = $60.00
Illustrative only. CFDs are complex instruments with a high risk of losing money rapidly due to leverage.
Two ways to begin.
Demo Account
Risk-freeDevelop your trading skills in a risk-free environment on live market conditions with $10,000 of virtual funds. Nothing at stake except the lesson.
Live Account
Real marketsAccess a wide range of FX and CFD products through our suite of platforms, funded from a local bank account or mobile money. Free to open, no minimum deposit.
Markets · CFDs
What are CFDs?
A contract for difference is an agreement to exchange the opening and closing price of a contract, multiplied by the volume of that contract. Unlike most traditional markets, it lets you go short in something you do not own.
The instrument
Trading without owning.
CFDs are financial derivatives. They let you take a position on a price moving up or down without ever holding the underlying asset, no share certificate, no barrel of oil, no bar of gold.
They also trade on margin, which means you post only a percentage of the position’s underlying value rather than the whole amount. That significantly increases both the profit and the loss potential, which is the trade-off at the centre of the product.
Because there is no delivery, a CFD is a very flexible way to trade, above all because of the ability to sell first in a market you expect to fall.
Worked example
Selling 10 CFDs in a falling market
You take a bearish view: you expect the price to fall, so you open with a sell.
You sell10 CFDs at 86.90
You buy to close10 CFDs at 86.84
Movement8690 − 8684 = 6 points
(8690 − 8684) × 10 = $60.00
Illustrative only. CFDs are complex instruments with a high risk of losing money rapidly due to leverage.
Get started
Two ways to begin.
Live Account
Real markets
Access a wide range of FX and CFD products through our suite of platforms, funded from a local bank account or mobile money. Free to open, no minimum deposit.