CFD trading

What is CFD trading?

A Contract for Difference, or CFD, is "An agreement between two parties to exchange the difference in value of a particular market, between the time at which the contract is opened and the time at which it is closed."

CFDs can be traded on UK, European, US and Asian stocks, indices, commodities and bonds.

With CFD trading, you can choose to decide that the market will rise, or fall. If you predict correctly and the market moves in your favour, you will make a profit of your CFD size multiplied by each point that the market moves. If you are wrong you will make a loss of your CFD size multiplied by each point that the market moves against you.

With CFDs you do not actually own the underlying asset that you are trading because it is a derived instrument. The prices that we provide you are derived from the underlying asset and these prices move in conjunction with that underlying asset.

Margin Products carry a high degree of risk to your capital. Losses can quickly and substantially exceed your initial investment. You may need to make further margin payments. Margin Products are not suitable for all investors. You should fully understand the risks and seek independent advice if necessary.

 

CFDs trading at a glance

CFDs can be sold short, offering new trading opportunities in falling markets, and used to hedge risk in existing Stock positions

  • Leverage CFD investments up to 20 times by trading on margin. Leveraged instruments carry a high degree of risk to your capital. Losses can quickly and substantially exceed your initial investment. You may need to make further margin payments
  • Choose from over 7000 stocks CFDs, Commodity CFDs (inc Oil, Gold and Silver), and Index Tracking CFDs
  • There is no Stamp Duty to pay on any purchases of CFDs
 

Index Tracking CFDs

Index Tracking CFD trading allows you to benefit from a diversified investment tool which combines leverage, low costs and ease of trading. Index Tracking CFDs offer customers the opportunity to engage in CFD trading against an entire index on real-time prices with just a single click.

  • Index Tracking CFDs are linked to the performance of a stock market index
  • Leveraged trading means maximum exposure with minimal capital requirements. Please note that leveraged instruments carry a high level of risk to your capital. Losses can quickly and substantially exceed your initial investment. You may need to make further margin payments.
  • Access to Index Tracking CFD trading opportunities across more than 20 exchanges worldwide, all with a single click
  • Competitive Bid/Ask spreads with no additional commissions
  • Trade Index Tracking CFDs for convenient one-click access to global stock market investing

Commodity CFDs

Commodity CFDs are an easy way for you to trade in the commodity markets. Offering traders direct exposure to the underlying commodity, our Commodity CFD offering makes investing in oil, grains, softs, energies, gold and other precious metals as simple as trading any other CFD instruments. With all the features commonly associated with CFD trading, Commodity CFDs represent a simple alternative to trading commodities on the Futures exchanges.

  • Trading on margin – from 5%
  • Please note that leveraged instruments carry a high level of risk to your capital. Losses can quickly and substantially exceed your initial investment. You may need to make further margin payments.
  • Accessible pricing - easy-to-understand single-unit pricing
  • Simplified trading - simple cash settlement in line with the underlying Future
  • Diversify your portfolio - easy portfolio diversification and new hedging opportunities
  • Selling short - Commodity CFDs are fully supportive of short selling.

Please remember that Contracts for Difference, FX and Futures are designed for active traders and involve leveraged transactions. This means that you only deposit a fraction of the full value of the trade. Consequently losses can quickly and substantially exceed you initial deposit and will require you to make further, possibly intraday, payments. CFD, FX and Futures should only be considered if you have significant investing experience and knowledge, a thorough understanding of the risks involved and if you are dealing with money that you can afford to lose. If you are in any doubt about the suitability of these products then you should seek independent financial advice.

Start Investing in Derivatives

Find out more about the TD Derivatives Service.

Read more

Risks

  • The value of your investments can go down as well as up. You may not get back all the funds that you invest.
  • Margin Products carry a high degree of risk to your capital. Losses can quickly and substantially exceed your initial investment. You may need to make further margin payments. Margin Products are not suitable for all investors.
  • You should fully understand the risks and seek independent advice if necessary.