Advantages of Trading CFDs
Trading CFDs offers many advantages over traditional share trading and investing, including:
- Transactions free from Stamp Duty - There is no stamp duty on equity CFD transactions, which makes trading CFDs a cheaper way to gain exposure to equities than trading physical shares*.
- Go long or short on a multitude of global financial markets
Not only can you go long (buy) any share, index, currency or commodity on our platform, but you can also sell them short, allowing you to profit from falling as well as rising markets. This can be beneficial if you are worried about the value of your share portfolio falling – if you sell the shares short via a Contract for Difference, and they fall in value, you gain on the CFD, offsetting what you lose on your physical share holding. - No commissions or hidden charges - All our dealing charges are included in the spread – there are no hidden extra costs or dealing commissions. Unlike our competitors, we currently do not charge you to roll an equity or index short position overnight, and our long overnight rolling charges are amongst the lowest around and are clearly displayed in your statements.
- Low Margins and Tight Spreads make your money go further - When you trade CFDs you are trading on margin –this means that you only have to put up a small percentage of the value of the product you are trading. This allows you to utilise less capital compared to traditional methods of trading. For example, if you wanted to buy 5,000 shares of BP at £4.00 per share you would need £20,000 to purchase those shares. When you trade equities via a CFD you place a 5% margin, meaning you would only need an initial investment of £1,000 to get the same exposure.
- Deal in large or small amounts - Unlike trading physical shares, when trading CFDs with Spread Co you can trade as little as one share, one index unit or 10,000 base currency units for FX.
- Instant execution of trades - When trading CFDs with Spread Co, your trade will be confirmed as soon as you hit the buy / sell button (this is subject to the deal or order size being within permitted limits).
*Please note: tax treatment may depend on individuals circumstances and tax laws may be subject to change.
