CFD Trading
CFD Trading with City Index gives you access to over 4000 global markets including Indices, Shares, FX, Commodities and Bonds.
- Tight spreads from 0.5 points on FX
- Choice of 4000+ CFDs from one account
- Awarded Best CFD Provider 2019 by ADVFN
Why trade CFDs with City Index?
Trade wherever you are, on our fast, reliable platforms
Customisable charts
Award-winning platform
Actionable trade ideas
Trade anytime, anywhere
Benefits of trading CFDs
No UK Stamp Duty
Trade on falling markets
Hedge your portfolio
Trade on margin
Discover CFD Trading
CFDs are popular with investors who want the opportunity to try to make a better return for their money.
However CFDs contain significant risks to your capital and aren’t suitable for everyone. We strongly suggest doing your research and trading on a demo account before you try it with your own money.
Learn more about CFD Trading
How to analyse markets
How to identify trading opportunities using City Index's research tools
How to manage risk
Learn techniques to improve your trading and manage risk effectively
Start CFD Trading
APPLY
for an account
FUND
TRADE
How to trade CFDs
1. Choose a CFD market
Decide which market you want to trade on. Get bullish and bearish trading ideas in our fundamental and technical analysis research portal
2. Decide to buy or sell
Click 'buy' if you think the price will increase in value or ‘sell’ if you think the market will fall in value
3. Select your trade size
Choose how many CFDs you want to trade
4. Add a stop loss
A stop loss is an order to close your position at a predetermined price set by you
5. Monitor and close your trade
Once you have placed your trade, you will monitor profit/loss update in real time at the top of the screen. Exit your trade by clicking the close trade button
Why City Index?
City Index
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Benefits of CFD Trading
No UK Stamp Duty
As CFDs are a derivative product, you don't actually own the underlying instrument that you are trading on. This means that you do not have to pay UK stamp duty, saving you the stamp duty charge associated with regular share dealing.
Ability to go long and short
With CFDs you can trade on falling markets by 'going short' (selling), just as easily as you can trade on rising markets by 'going long' (buying).
If you believe a company or market will increase in value you take a long position (buy). Your profits will rise in line with any increase in that price and your losses will increase with any fall in that price.
On the other hand, if you believe that a company or market will experience a loss of value you can use CFDs to go short (sell). Your profits will rise in line with any fall in price (and your losses will rise in line with any increase in that price).
Reduce your capital outlay using margin
CFDs are a leveraged product, which means you pay a small percentage of the total trade value to open your position, known as margin, rather than paying to cover the entire cost of your position.
For example, if a market has a margin requirement of 10% then you would need to have 10% of the full value of the trade in your account, as initial margin, to open the position.
Leverage is good news if the market moves in the direction that you expect, but it carries a high degree of risk if the market moves against you. In the same way that your profits are magnified, any losses will also be magnified and you could lose more than your initial investment.
Hedge your portfolio
If you believe your existing portfolio may lose some of its value, you can use CFDs to offset this loss by short selling.
Let's say you hold £5,000 worth of Vodafone shares in your portfolio. You can short sell the equivalent of £5,000 worth of Vodafone shares through a CFD trade.
In the same way that your profits are magnified, any losses will also be magnified and you could lose more than your initial investment.
Access global markets & 24 hours trading
CFD trading gives you access to a wide range of markets that would not otherwise be available to retail investors, all from one trading platform. You can speculate on the price movement of thousands of individual shares, indices, currencies, bonds and interest rates from across the globe.
We know it's important for you to be able to access your account and trade whenever you want, wherever you are, particularly when market prices are moving quickly. So, we give you unrestricted access to your account 24 hours a day, 7 days a week.
Summary of differences between CFD trading and share trading:
| Feature | CFD trading | Shares dealing |
|---|---|---|
| Free from Stamp Duty* |  |
|
| Commission charged | |
|
| Ability to go long – buy and take advantage of rising prices | |
|
| Ability to go short – sell and take advantage of falling prices | |
|
| Ability to hedge – go short and mitigate against potential losses in your shares portfolio | |
|
| Leveraged trading – gain a large exposure for a fraction of the value | |
|
| Immediate dealing – instant trading both in and out of a market | |
|
| Access to other asset classes – such as indices, FX, etc | |
|
| Access to global shares – trade over 5000 different markets from around the world | |
|
| Receive dividend and interest adjustments | |
|
| Physical ownership – benefits include the ability to attend AGMs | |
|
| Pay overnight financing charge | |