Please complete the form opposite to receive your free CFD guide. Alternatively, if you’re ready to start trading CFDs, visit our account application page.
CFDs, the main features:
- No stamp duty on CFD positions*
- Go long or short on your chosen market
- Lower outlay – open a position for as little as 1% margin
- No position expiry
- Deal at market prices the DMA and level 2 data – no added spread
A CFD is a contract on an underlying asset (for example, a share, commodity or currency) to pay or receive the difference between the opening price and the closing price of the underlying asset.
CFDs allow you to trade in the financial markets without actually owning the underlying asset on which the CFD is based.
You can make money from CFDs… [click below to read more]
…whether the market (e.g. a share price) moves up or down. This is known as ‘going long’ (making money when the market goes up) and ‘going short’ (making money when the market declines). Of course, if the market moves against you (e.g. it goes down when you went long) you’ll make a loss, much like conventional types of trading. To learn more, please request your complimentary CFD guide or view the example below.
To receive your complimentary CFD guide with the aid of examples, please enter your details opposite.
At Accendo Markets, we pride ourselves in our ability to help you understand the CFD market. We have been nominated for ‘Best CFD Provider’ at the Shares Awards for 3 years running, as well as winning the ‘Best Execution-Only CFDs’ at the Daily Telegraph Wealth Management Awards in 2010. This was our second award from the Daily Telegraph Wealth Management Awards.
We aim to give you the best trading education and up-to-date information we can, including our CFD guide and How to Trade guide, in order to equip you with the knowledge you need to make informed trading decisions.
Contracts for Differences are contracts whereby you receive the difference between the price you opened the contract and the price you closed the contract. Subsequently, if your trade fails you’ll be liable to pay the difference between the opening and closing price of the trade.
If you’re looking to experience CFD trading, you might like to try our free no-obligation 14-day CFD platform trial. This allows first-timers and experienced traders alike to trade with fictional money in order to get comfortable with the CFD trading platform. Alternatively, request your CFD guide and get started today.
There are some significant reasons why people chose to use CFDs over other forms of trading. Of course, our CFD guide will give you a full breakdown of the features of the product. Some of these are listed below:
- No need to deposit the entire amount of a trade: When using CFDs, you are not required to deposit the total notional value of the trade into your account prior to execution. In some circumstances, you can trade on margins as low as 5% for UK equities. For example, if you are looking to take a position of £10,000 in an equity position with a 5% margin requirement, you are only required to deposit £500.
- No fixed market direction: You are able to trade on stocks going up or down (i.e. go long and short), meaning that you are able to make money if you correctly predict the decline of a certain stock.
- No expiry date: CFDs do not have an expiry date, meaning you can hold the contract for as long as you want.
- Access to Level 2 Trading Data: When using CFDs, you have access to Level 2 data. This gives you up-to-date information on market sentiment and trading volumes.
- Use of Direct Market Access: Direct Market Access allows you to place trades on the ‘order book’, meaning you can obtain the best market price for your shares. If conditions are right, you can even place your order within the market spread. With DMA, you can place your limit order and wait for the fill, negating the need to ‘market watch’ while you wait for your stock to reach your preferred price.
- No Stamp Duty: CFDs are increasingly popular in the UK as they are not currently subject to stamp duty*, as with traditional share trading.
- After receiving our daily research updates, you believe that the shares in Vodafone will rise from 260p a share to 300p a share.
- You call your dedicated Accendo Markets trader and inform him of what you believe will happen to Vodafone shares. You decide to enter the market when the price reaches 250p a share, so a limit order is placed at 250p – this means you’ll enter the position automatically if the price hits this level.
- You ask to purchase 4000 shares at 250p. Once the order is filled, you want to place a stop-loss at 240p and a limit at 300p. You can do this by adding ‘contingent orders’.
- You are informed that the margin requirement for Vodafone is 5%, meaning that you are only required to have £500 in your account in order to execute the trade. In practice, you may decide to put more into your account to provide a ‘buffer’.
- You are informed of the risks of trading using CFDs and you end the call.
- A day later your trader calls you to inform you that the stock is at 275p a share. Your trader will never advise you to sell the stock. However, they may inform you of trade progress and allow you to decide whether you would like to continue holding the contract or close the trade and take your profit.
- After a week of holding the contract your trader calls you to inform you that the stock has reach 300p a share. You had a limit in place at 300p, so a profit was automatically realised at this level.
- Of course, this is an example of a profitable trade. If the stock had moved in the other direction, you would have realised the equivalent loss. More CFD trading examples are available on our website and on our CFD guide. Complete the form opposite to receive your guide.
You may decide to place the trade on your CFD trading platform, rather than with your broker. Either way, we won’t charge you extra for telephone dealing.
As CFDs are leveraged products, your overall loss could exceed your initial deposit. In the example above, you were required to commit a 5% margin (£500), yet you could be subject to pay the full £10,000 under extreme circumstances. Specifically, if the stock price fell to zero, you may be liable for the whole consideration. However, tools such as stop-losses are available to manage your risk. A stop-loss is an order to close your position at a pre-determined level, therefore controlling your risk.
*Under current UK tax law. Tax laws may be subject to change.