CFD trading is the act of exchanging the difference between the opening and closing price of a Contract for Difference (CFD), which is an agreement between two parties.
CFD trading allows traders to speculate on the price movements of financial markets, without owning the underlying shares.
The main features of CFD trading:
- No Stamp Duty – CFD’s are currently exempt from Stamp duty*.
- Ability to go long or short – With CFD’s you can find profit potential whether the markets are rising or falling.
- Leverage – Because CFD’s are traded on margin you only have to deposit a small percentage of the total value of the position allowing you to maximize your trading resources.
- Hedging – Some investors use CFD’s to hedge their existing share portfolios against short term price fluctuations and during times of increased volatility thus protecting their overall exposure to the market.
- Access to Global Markets – You can trade CFD’s on an extensive number of financial instruments all from the one account.
*CFD’s are currently exempt from Stamp Duty however UK tax laws are subject to change.
Contracts for Difference (CFDs) & Foreign Exchange (FX) are leveraged products and carry a high level of risk to your capital as it is possible to lose more than your initial investment rapidly & substantially.
Please don’t hesitate to contact us for more information regarding CFDs.