A CFD is an agreement between two parties to exchange at the close of a contract, the difference between the opening price and the closing price of the underlying instrument.CFD trading is very similar to normal share dealing. You deal at the cash price of the share, and pay a commission which is calculated as a percentage of the value of the transaction.

No rights are acquired or obligations incurred relating to the underlying share. It is a single trading tool for both long and short strategies, a non-exchange traded product with shares as the underlying instrument. Unlike trade settlement for shares, each CFD contract has an expiry date of 30 calendar days although investors can close out anytime before that. CFD prices are highly correlated to the price movements of the ready market.

In CFD, when you open a position, you do not have to pay for the full value of the shares. Instead you put up a deposit. While your position remains open, your account is debited or credited to reflect interest and dividend adjustments.

Long positions

Here your account is debited to reflect interest adjustments and credited to reflect any dividends. This mirrors the effect of buying shares in the normal way, where you no longer earn interest on the cost of the shares, but do receive dividends.

Short positions

Your account is credited with interest adjustments and debited to reflect any dividends. This mirrors the effect of selling shares, where you earn interest on the proceeds of the sale, but cease to receive dividends.

Investment Opportunities

• Immediate Short Selling
• Receive Interest for being Short
• Providing access to Asia, Europe, USA, Australia and New Zealand
• Provides a 100% hedge when index's are not accurate
• Providing economic exposure to a company's share performance without taking or making physical delivery
• Low execution cost
• No Stamp Duty is payable
• Delivering a geared return on the capital employed
• Freeing-up capital not required for margin for other uses
• Allowing you to close-out a position at any time
• Potentially positive daily cash flows

Features

Our CFD service includes special features:

• Convenience to take Short (Sell) or Long (Buy) positions using a single CFD account.
• Overcome the T+3 day constraint. All CFD contract can be closed out prior to expiry date or extended beyond the 30 calendar days.
• Trade up to 5 times of your capital.
• No delivery of shares needed, and no clearing fees.
• Trade Online and queue up to 3 bids.
• The ability to go long or short
• Immediate execution
• Optional guaranteed stops put an absolute limit on your risk
• Competitive deposit rates

Advantages of using Our CFD

Risk Protection: You can trade with Limited Risk. If the market moves sharply against you, your position will be closed at your chosen Stop level-even if the move is overnight.

No minimum Deal Sizes: There is any minimum deal size for CFDs on individual shares.

Immediate Dealing: There is no irritating wait for an execution.

Trading Shares on Margin: You can trade thousands of individual shares on margin using Contracts for Difference (CFDs). CFDs have substantial advantages over normal share dealing.

Gearing: You can take a position in a share without having to put up the full underlying contract value. Instead you put up a deposit or margin as initial collateral. The minimum margin requirement can be just 10% of the contract value (or 5% for Limited Risk trades).

The ability to go short: You can go long or short of any share that we quote. Other methods of shorting shares are often inconvenient and expensive.

No Stamp Duty: There is no stamp duty to pay when you trade share using Contracts for Difference. Huge Range of Markets: A trader can profit from any market movements, anywhere in the world and in any asset type, all from one account.

Market direction is now no longer important: With CFDs you are able to profit from a falling share price as well as a rising price. Cap Your Potential Downside: Use limits stops to open and close positions automatically in your absence.

Trading Strategies

Short Term Trading: The ability to gear up your trading capital by trading on a margin combined with no stamp duty make the CFD an ideal instrument for short-term trading.

Hedging: You can use a CFD to protect your long-term holdings against variable market conditions. It may be cheaper to open a short CFD position in the shares rather than sell the physical shares in order to buy them back later.

Pairs Trading: If you believe that one company is undervalued compared to another company you can use CFDs to go long on the cheaper stock whilst going short the more expensive stock.

Tax Efficient Trading: If you have a holding of physical shares you can sell CFDs against this without crystallizing a potentially taxable capital gain. This enables you to control the time at which you realize capital gains or losses and may reduce your tax liability.

Risks of Contracts for Difference (CFDs):

• The geared nature of margin trading markets means that both profits and losses can be magnified and unless you place a stop loss you could incur very large losses if your position moves against you.
• It is less suited to the long term investor, if you hold a CFD open over a long period of time the costs associated increase and it may be more beneficial to have bought the underlying asset.
• You have no rights as an investor, including no voting rights.