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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.

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.

No Stamp Duty
There is no stamp duty on CFDs as you do not actually Buy the underlying share*.
*Tax laws may change

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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.

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

Shares and Indices
CFDs allow you to take a view on shares and indices as well as some sector specific indices (such as Mining). 

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.