Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Open CFD account and trade in forex, indices, shares, commodities.
With thousands of financial instruments and pay no stamp duty on UK shares.
CFD Trading
Call 020 7638 6996 or email newaccounts@guardianstockbrokers.com to discuss opening a CFD trading account.
What is CFD Trading ?
A CFD is a derivative that allows you to trade on the price on thousands of financial instruments, without owning the underlying asset. You simply place a transaction based on the movement of the price of any given asset and profit if the market moves in your favor or make a loss if it moves against you.
CFDs are leveraged which means you only need a small deposit to control a much larger investment, this feature will magnify your profits and your losses.
Key features of CFDs
1 Traded on Margin
Rather than pay the full value of a transaction you only need to pay a percentage when opening the position. This is referred to as ‘Initial Margin’. The key point is that the margin allows leverage, so that you can access a larger amount of shares than you would be able to, if buying or selling the shares themselves. The margin on all open positions must be maintained at the required level in order to keep the position open. If a position moves against you and reduces your cash balance so that you are below the required margin level on a particular trade, you will be subject to a ‘Margin Call’ and will have to pay additional money into your account to keep the position open or you may be forced to close your position.
2 Trade in Rising or Falling Markets
CFDs allow you to trade ‘Long’ or ‘Short’. A Long trade is where you ‘Buy’ an asset with the expectation that it will rise, just as you would when buying a normal share. A Short trade is where you ‘Sell’ an asset that you do not own in the expectation that the price will fall and you can Buy the asset back at a cheaper price.
3 No Stamp Duty
There is no stamp duty on CFDs as you do not actually Buy the underlying share*.
*Tax laws may change
4 Commission
Commission is charged on CFDs just like on an ordinary share trade. The commission is calculated on the total position value not the margin paid.
5 Overnight Financing
Because CFDs are traded on margin, if you hold a position open overnight it will be subject to a finance charge. Long CFD positions are charged interest, Short CFD positions will be paid interest. The rate of interest charged is set at 2.50%** above or below the current LIBOR (London Inter Bank Offered Rate). The interest on each position is calculated daily by applying the applicable interest rate to the daily closing value of the position. The daily closing value is the number of shares multiplied by the closing price. Each day’s interest calculation will be different unless there is no change in the share price.
** Subject to change
6 Shares and Indices
CFDs allow you to take a view on shares and indices as well as some sector specific indices (such as Mining).
7 Risk Management Facilities
We place strong emphasis on risk management techniques. Robust risk management to protect profit and limit downside risk
is as important as placing the trade. Because of the higher risk nature of trading on margin, we can offer comprehensive ‘Stop Loss Order’ and ‘Limit Order’ facilities so that investors can manage risk in fast moving markets.
Share CFD example long trade
A Long trade is when you Buy a share CFD
Marks and Spencer is trading at 240–240.25p
You believe that Marks and Spencer’s share price is going to rise and place a trade to Buy 5000 shares as a CFD at 240.25p.
The value of the contract would be £12,012.50, but you would only be required to make an initial deposit of 7.5% (Initial Margin of £900.94.
The commission on the trade is £12.01 (£12,012.50 x 0.1%) unlike a traditional share there is no stamp duty payable.
10 days later Marks and Spencer is trading at 270–270.25p
You decide to close your position and take a profit by selling 5000 Marks and Spencer at 270p which equates to £13,500.
The commission on the trade is £13 .50 (£13,500 x 0.1%).
Profit on trade is calculated as follows:
Of course if the market had moved against you, you would have made a loss.
Share CFD example short trade
Share CFD example Short Trade
A Short trade is when you Sell a share CFD
Marks and Spencer is trading at 300–300.25p
You believe that Marks and Spencer’s share price is going to fall and place a trade to sell 5000 shares as a CFD at 300p. The value of the contract would be £15,000, but you would only be required to make an initial deposit of 7.5% (Initial Margin) of
£1,125.
The commission on the trade is £15 (£15,000 x 0.5%).
10 days later Marks and Spencer is trading at 280–280.25p
You decide to close your position and take a profit by buying 5000 Marks and Spencer at 280.25p. The commission on the trade is £14.01 (£14,012.50 x 0.1%).
Profit on trade is calculated as follows:
Benefits of CFD trading with Guardian Stockbrokers
Dedicated relationship manager
Highly experienced and qualified, and on hand to assist you as much or as little as you need.
No Stamp duty to pay
Unlike most UK shares there is no stamp duty to pay.
Small initial deposit
With CFDs you only pay a small percentage of the trade value.
Trade with a FTSE 250 company
Authorised and regulated by the FCA (1).
Competitive spreads
Helps keep your costs of CFD trading down.
Negative balance protection (2)
You can never lose more than is in your account.
Of course if the market had moved against you, you would have made a loss.
In this example by being Short M&S, interest payments are credited to your account.
A range of over 17,000 markets
Tradable with a Spread bet and CFDs allowing you to benefit from both rising and falling prices
What are the costs of CFD Trading?
Margin
Spread betting is a margined product. This means that you are only required to pay a deposit to control a much larger amount.
This will magnify profits and losses.
Spreads
This is the cost to trade. The spread is the difference between the buy and sell price. The spread is effectively a commission charged for executing the trade. The spreads we can offer are among the lowest in the industry. You may also be charged overnight funding on some positions.
Minimum Spreads
Award-winning
Guardian Stockbrokers reviews
Positive: Professionalism, Quality, Responsiveness, Value
I could not more highly recommend Guardian Stockbrokers, everyone has been brilliant. The attentiveness, training and technical detail provided, has enabled a fast track learning and an ability to manage the portfolio in a way that would far exceed my own capabilities. It is almost as though they own the positions themselves; via their due-diligence and proactive manner of continuous monitoring. Above and Beyond.
Positive: Professionalism, Responsiveness
Professional and proactive I’m really happy that they were recommended to me.
I would recommend Guardian Stockbrokers.
I've known Guardian Stockbrokers since their inception.
When dealing with trading, you want to work with people that are professional, personable and trustworthy.
Guardian Stockbrokers are all of the above.
I'd recommend them any day!
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How to open a spread betting demo account ?To open your demo account, all you need to provide is a valid email address, your full name, phone number, username, and password. Open demo now
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What can I do on the spread betting demo account ?The demo account is there to make you comfortable using the platform and provide a realistic trading experience. The demo trading account allows you to trade CFDs and Spread bets with access to over 17,000 markets to practice on, including shares, indices, FX, commodities, and cryptocurrencies.
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What is important to remember with a spread betting demo account ?There are circumstances that we just can’t recreate for you. We can however from our experience, try to prepare you for them. With the demo account you have no emotional commitment or real financial consequences for your actions, and this can lead to over trading. You should try and replicate your demo trading plans as closely as possible to your real trading plans. For example, trading size, exposure, and trading instruments. You start with balance of £10,000, however more virtual funds can be added. Practise placing trades and closing trades, so that when you see an opportunity on the live platform, you can execute those trades even when the pressure of trading is high.
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What are the differences between a spread betting demo and live account?A demo account provides a risk-free environment for you to try our web trading platforms. While much of the functionality of the live platform features in the demo, there are key differences to be aware of, including (but not limited to): Trades made through the demo account will not be subject to slippage, interest and dividend adjustments, or out of hours price movements. Trades may be rejected if you have insufficient funds to open them, but, unlike on a live account, will never be rejected on the grounds of size or price. You will not be charged for chart packages on a demo account. Trades will not be closed if you have insufficient funds to cover margin and running losses, which can happen on a live account. This is by no means an exhaustive list, therefore before opening a live account we recommend you read the information available on our website as well as the Customer Agreement to ensure that you are aware of the features of a live account
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How do I move from a spread betting demo to a live account ?From the platform you simply click the “upgrade to live account” button on the top right and complete the application.
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Guardian Stockbrokers are regulated and authorised and our platform provider IG are listed on the FTSE 250 and authorised and regulated by the FCA.
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Negative balance protection applies to trade related debt only and is not available to professional traders.