CFDs vs Spreads

If you want to trade CFDs, you have 2 basic choices:

Trade through a company that doesn’t charge commission, but adds a spread to the market’s prices
Use a company that charges commission, but lets you trade on real market prices without widened spreads.

Perhaps the most important aspect to successful trading is dealing at the best prices. Some companies do not charge commission, but instead may add, 0.5p, say, to both sides of the price in the stock market. If the price is around 100p, that would be equivalent to charging commission of 0.5% per trade.

The ‘spread’ is the traders biggest cost, yet it never appears on the contract note. With MF Global, the real cost of your trading could be considerably reduced!

Once you’ve got used to using Level 2 and trading at prices between the market spread, you won’t want to go back to wide spreads and being told at what prices you can deal.


  • Fed up with paying wide spreads?

  • Fed up with prices being skewed?

  • Fed up with being requoted?


Try our Free CFD Demo
 

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Futures, CFD, Margined Foreign Exchange trading and Spread Betting carries a high level of risk to your capital. A key risk of leveraged trading is that if a position moves against you, the customer, you can incur additional liabilities far in excess of your initial margin deposit. Only speculate with money you can afford to lose. Futures, CFD, Margined Foreign Exchange trading and Spread Betting may not be suitable for all customers, therefore ensure you fully understand the risks involved and seek independent financial advice if necessary.

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