CFDs provide traders with a convenient way to trade the financial markets using leverage. This means that you can trade commodities, equities and FX by committing a CFD margin or deposit without the need to invest the full exposure.
Trading in the spot market (e.g. when buying shares) requires you to invest the full amount of the shares’ worth. For example, if you wanted to buy £10,000 worth of BP shares, you would have to commit £10,000. With CFDs, you’re only required to commit CFD margin to open the position, which can be as low as 20%. In this example, you would have to commit only £2000 to open the BP position using CFDs.
The initial CFD margin requirement may be increased if the position moves against you. This is known as variation margin. If unused equity is held in the trading account, this will be used to maintain the position. If no free equity is available, more equity will be required to maintain the position. Consequently, your CFD margin should be monitored regularly, and the use of stop-losses considered to help mitigate your risk. Guaranteed stop-losses may also be used to guard against CFD margin calls.
You can trade a vast range of assets with Accendo Markets, each with varying CFD margin requirements. Underlying CFD markets include precious metals such as gold and silver, base metals like copper and lead, as well as soft commodities like coffee and wheat. You can trade indices like the UK 100 index and S&P 500, as well as their individual constituent shares. You can also trade a wide range of major currency pairs like EUR/USD and GBP/EUR, as well as exotic currency pairs like GBP/NZD and USD/MXN.
If you have any questions about CFD margin requirements and features, feel free to call our customer service team. Alternatively, click on one of the links below for a full list of CFD margin requirements.