Understand CFDs before trading
Price exposure, margin, costs and the risks of leverage.
Exposure without ownership
A contract for difference, or CFD, provides exposure to changes in a reference price without acquiring ownership. Trading a CFD on a share is therefore not the same as being a shareholder. Rights and conditions depend on the contract.
Margin and leverage
Margin is an amount required to maintain exposure. Leverage means a small price movement has a proportionally larger effect on the capital used. A fall in available margin may result in positions being closed under the account rules.
Costs and execution
Spreads, financing, currency conversion and other charges may affect the outcome. During low liquidity or sharp moves, execution may take place at a different price from the one expected. Before trading, read the specific conditions and consider the possibility of losing all your capital.