What’s the difference between CFD and share trading?
The main difference between CFD trading and share trading is when you trade a CFD you don't own the underlying share.
With a CFD you never actually own the asset or instrument you have chosen to trade, but you can still benefit if the market moves in your favour, or make a loss should the market move against you. With share trading however you enter a contract to exchange the legal ownership of the shares for money and you own this equity.
CFDs are a leveraged product, which means that you only need to deposit a small percentage of the full value of the trade in order to open a position. With share trading you purchase the shares for the full amount owing either using individually-held electronic funds or a margin loan.
|Range of markets you can trade||Over 9,500 products. Including Forex, Equities, Commodities, Indices, etc ||Equities and ETFs|
|Long and Short||Can trade both rising and falling markets||Can only profit from asset price increases|
|Trading hours||CFDs can be traded up to 24-hours 5 days a week||Only when the Stock Exchange is open|
|Costs of trading||Spread (excl. shares), Holding Costs, Commission||Commission|
|Dividends||A cash adjustment is made to reflect dividends.||Yes - As per company|
|Own the asset||No||Yes|