Contracts for Difference

A Contract for Difference ("CFD") is simply an agreement between two parties, to exchange at the close of the contract, the difference between the opening and closing price. CFDs give the owner the benefits of share ownership without physical ownership of the underlying security.

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Advantages
Margin Trading
Characteristics
Example A - Long CFD
Example B - Short CFD

Important Notice

CFDs carry a high risk to your capital and you should only trade with money you can afford to lose. The value of a CFD can fall as well as rise and income and capital are not guaranteed. You could lose all the money you invest and may have to pay additional funds to meet further margin calls.

CFDs are classified as derivatives by the FSA and are more risky than other investments. Private customers are required to conclude a contract with Credo mandating us to act on their behalf and to sign an acknowledgement that they have read and understood the derivative risk warning notice that is attached to Credo's Terms and Conditions for Derivatives, which are issued before trades can be executed.

CFDs may not be suitable for everyone, given personal risk profiles and investment objectives and you should consult us to determine suitability.

The examples that have been included in this website to illustrate the nature of gearing do not include factors such as commission, stamp duty, dividends and interest.