CFD trading enables you to go long (buy) if you believe market prices will rise, or go short (sell) if you believe market prices will fall. So if you believe that a company or market will experience a loss of value in the short term, you can use CFDs to sell it today, and your profits will rise in line with any fall in that price. However, if the market moves against you, your losses will also increase. CFDs are therefore a flexible alternative to trading the movements of market prices as they enable you to benefit from any move, regardless of whether the markets are rising or falling.
If you believe your existing portfolio may lose some of its value, you can use CFDs to offset this loss by short selling. For example, let's say you hold $5,000 worth of Vodafone shares in your portfolio. You can short sell the equivalent of $5,000 worth of Vodafone shares through a CFD trade. Should Vodafone share prices fall by 5% in the underlying market, the loss in value of your share portfolio would be offset by a gain in your short sell CFD trade. Many investors today use CFDs to hedge their portfolio, especially in volatile markets
We recognise the importance of being able to access your account and trade whenever you want, wherever you are, particularly when market prices are moving quickly. We therefore give you unrestricted access to your account 24 hours day, 7 days a week. Furthermore, we run a number of our markets up to 23 hours a day, including major indices such as the UK 100 and Wall Street, meaning you can trade CFDs even if the underlying markets are closed.
CFDs are traded on leverage, meaning you pay only a small fraction of the total trade value to open your position rather than paying for it in full, this is known as margin. For example, you can trade Vodafone shares by depositing a margin of just 5%.
You can use leverage to magnify your return on investment as your full trade exposure is much more than the initial deposit required for your trade. However, your losses are magnified in exactly the same way if the market moves against you and can lead to losses exceeding your initial outlay. Please ensure you fully understand the risks involved and seek independent advice if necessary.