Spread Co offers the choice of two different types of CFD trading account, so you can choose which works best for your trading style and strategy:

The "Consolidated Account" allows for consolidated position keeping and provides you with a netted open position view. The "Single Positions" trading account allows you to keep each position in a given instrument open separately without positions being netted off unless you specifically choose to do so, so you can be long and short in the same market at the same time.

Consolidated Accounts

Consolidated Account open positions are automatically netted off against each other. For example, if you have a long trade open in Tesco shares (ie. you have bought a CFD on Tesco shares) and you subsequently place a same size short trade, or sell a CFD on the Tesco shares, the "sell" or short trade will automatically close off the original open "buy" or long trade. Therefore your profit/loss will be realised when the opposite trade to an open position is executed. This is normally suitable for clients who are likely to trade a single instrument frequently.

Single Positions Accounts

For Single Positions Accounts, each trade is treated as an individual open position. When buy and sell trades in a single instrument are created, all positions are kept open and will not be netted off until you manually choose to close an open position or net more than one position off. So for example, you might choose to keep a separate long and short position open in Tesco shares. This type of account might suit a more experienced trader who, for example, might be holding open long term trades but wants to place some short term trades in the opposite direction.

An example

On day 1 the following trades are placed:

• Buy 10 UK100 @ 5965
• Buy 10 UK100 @ 5912
• Sell 10 UK100 @ 5975

Consolidated Position Account

Based on the FIFO method (first in, first out), the first 10 UK100 contracts bought at 5965 would therefore be closed when the 10 contracts are subsequently sold, leaving the 10 contracts bought at 5912 open. The remaining position would be displayed on your Positions tab, and the profit from the closing trade added to your closed P&L.

Single Position Account

You would hold open the three separate trades until you decided to close one or more of them. The positions would be displayed separately in your Positions tab, but also a net position is shown with an average price of long 10 at an average price of 5951

For more information on the two types of account, please see here for our User Guides.
If you have any further questions on the different account types, please Contact Us and we will be delighted to answer them.