Advantages of CFDs


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    24 hour Trading

    With CFDs you are no longer limited to exchange hours. Most of our indices, commodities, and forex contracts are available for trading between 5:00 pm ET Sundays and 5:00 pm ET Fridays

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    Trade on both rising and falling markets

    With CFD trading, you can trade on the price of a product going down as well as going up, and try to benefit from selling opportunities as well as buying opportunities. Many investors use CFDs as a way of hedging their existing portfolios through periods of short-term volatility.

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    Efficient use of your capital

    One of the key advantages of CFD trading is that you can trade using margin, which gives you 'leverage'. This means you can trade without having to put down the full value of a position and as your money is not tied up in one transaction, you can use it for other investments.

    For example, to buy the equivalent of 100 US Telecom company share CFDs with CMC Markets, you may only need to deposit 20% of the total position value that you might have to pay if you were buying physical shares from a stock broker.
    If each share costs $50.00 then you would only need to deposit $1000 of position margin with CMC Markets (20% of $5,000 = $1,000) plus the applicable CMC commissions, which in this instance would be $8.00. To complete the equivalent trade with a stockbroker you would have to put up margin of at least 30%, or $1,500, plus commission and taxes. Click here to see a more detailed CFD trading example.

    Trading using margin means you can magnify the returns on your investment but it is important to remember that losses will be magnified as well and it is possible to lose more than your initial deposit. There are many tools on our platform that help you manage your risk effectively.