Pricing

CFDs are priced almost identically to their underlying instruments and are typically quoted on a spot basis. This means that CFD prices move in real-time as the prices of their underlying instruments move on the relevant exchange on which they are quoted or in the inter-bank market.

For example:
The underlying instrument for a Rio Tinto CFD is one share of Rio Tinto (RIO) stock. If RIO is trading at 3391p per share, then Spread Co will quote a price for RIO CFDs around this price. For example, the price quoted may be: 3388p -3394p

The Spread

The spread, also known as "the dealing spread" or "the buy / sell spread", is the difference between the prices at which you can buy and sell the CFD in which you want to trade.

For example:
In the above RIO example, if Spread Co is quoting RIO at 3388p - 3394p, the lower figure (3388p) is the sell price and the higher figure (3394p) is the buy price. This means that you can sell RIO at 3388p and buy at 3394p. The spread in this example is 6p.

The spread is how market makers such as Spread Co are compensated for creating a market for you to trade CFDs. With Spread Co, this is the only charge you will incur to place the trade, however you will be charged daily financing fees should you hold a position overnight. Spread Co offer some of the tightest spreads and lowest financing charges in the industry.

Spread sizes vary by instrument depending on:

• the liquidity of the underlying instrument
• the volatility of the underlying instrument
• the amount of freely traded shares that exist for the relevant underlying instrument

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