Contracts for Difference (CFDs) Explained

An increasingly popular way of trading financial markets without the costs associated with share purchase

CFDs (Contracts for Difference) are similar to spread betting and also have some tax advantages over regular share dealing, depending on your circumstances. They’re used widely by financial professionals to hedge their positions against unexpected upward or downward swings in market values.

How CFDs work

CFDs are legal contracts between two parties – usually called the ‘buyer’ and the ‘seller’. Under the contract, the seller pays the buyer the difference between the value of an asset at the time the contract was made, and its value when the contract ends, if the price has moved the way the buyer expected.

If the value of the asset doesn’t move the way the buyer expected, then the buyer has to pay the seller the difference instead.

Find out about the advantages of CFDs

Trading CFDs with Spread Co

With Spread Co you can trade CFDs on a huge range of markets. Our online CFD trading platforms are easy to use and give you live pricing to help you plan your trades. You’ll also have access to our powerful charting features.

Take a look at our trading platforms

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Spread betting and CFD trading are leveraged products and can result in losses that exceed your deposits. Ensure you understand the risks.

Losses can exceed deposits. Click here to learn more.