Shares trading

A share represents a portion of the ownership of a public company. The shares of a publicly listed company will be available on a stock market, such as the FTSE 100 index, whose constituent stocks are listed on the London Stock Exchange.

Trading shares in the underlying market involves the buying and selling of a company's shares, with the aim of profiting through the company's share price rising over time. The aim would be to sell your shares at a higher price than when you bought them.

You can spread bet or trade CFDs on shares with us, without actually owning the underlying share. Learn more about share trading

One of the features of spread betting and CFD trading is that you only need to deposit a percentage of the full value of your position – the initial margin requirement – to open a trade, known as trading on leverage. Trading on leverage amplifies your profits and losses equally, so it's important to manage your risk.

When you spread bet or trade CFDs on shares on our platform, you don't buy or sell the underlying share. Instead, you're taking a position on whether you think the company's share price will go up or down.

With spread betting, you buy or sell an amount per point movement for the share instrument you’re trading, such as £5 per point. This is known as your stake. With CFD trading, you buy or sell a number of units for a particular instrument. For every point or unit that the price moves in your favour, you gain multiples of your stake, and vice versa.

As an example, say you wanted to buy £1,300 worth of Lloyds penny shares at £65 per share. For the spread betting equivalent of this trade, you would specify a stake size of £20 per point to get the same exposure as you would if you bought 20 Lloyds shares at £65 through traditional share dealing. Due to the leverage available with spread betting (5:1 in this case), you would be able to enter this position with an initial outlay of £260, instead of £1,300. However, your profits and losses are based on the full value of the trade (£1,300). As a retail client, negative balance protection means that you will never lose more than the available cash in your account. View our spread betting versus CFDs comparison.

Share spread bets have an additional spread added either side of the existing spread. See our UK and US share spread bet examples below.

UK shares example:

CFD price/underlying sell/buy price: 250p/255pA CMC 0.10% additional spread is added to either side, widening the spread: 250p - (0.1% of 250) / 255p + (0.1% of 255) Spread bet sell/buy price = 249.75p / 255.25p

US shares example:

Share price / Cost $0-15 | 1 cent (each side) $15-25 | 2 cents (each side) $25-35 | 3 cents (each side) $35+ | 4 cents (each side)

CFD price/underlying price: $25.50 / $25.58

Share price falls into bracket three: $25-35.

So, 3 cents is added to both sides, widening the spread: $25.50 - $0.03 / $25.58 + $0.03

Spread bet sell/buy price = $25.47 / $25.61

Spread betting allows you to trade tax-free on a wide range of financial markets up to 24 hours a day, from Sunday night through to Friday night. Spread bet on your mobile device or PC on a wide range of instruments with leverage.

The main difference between CFD trading and share trading is that you don't own the underlying share when you trade on a share CFD. With CFDs, you never actually physically buy or sell the underlying asset that you've chosen to trade, but you can still benefit if the market moves in your favour, or make a loss if it moves against you.

With CFDs, you also trade with leverage, which means your initial deposit is smaller, although any profits or losses you make are based on the trade's full value. With traditional share trading, you enter a contract to exchange the legal ownership of the shares for the full value upfront, and you then own this equity.

When a stock goes ex-dividend, the value of that stock effectively falls by the dividend amount. This means if you hold a spread bet or CFD position on a company which announces a dividend, your account will be credited or debited on the day the stock goes ex-dividend.

If you were long (holding a buy position), you would have been disadvantaged by the drop in the market caused by the pay out of the dividend, so we would credit your account with the dividend amount, less any applicable dividend withholding taxes. If you were short the stock, you would benefit from the drop in the price, so the equivalent amount would be deducted. So, overall, you don't lose or gain anything from the adjustment. There are no withholding taxes on short positions. The dividend will appear as a 'Price Adjustment' in your account history within the platform.

You can spread bet or trade CFDs on 67 US stocks – including the 'magnificent seven' of Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla – 24 hours a day, five days a week, from 1am Monday through to 10pm Friday (UK time).* We also offer extended trading hours on a further 20 major US shares. This means you can spread bet or trade CFDs on these 20 stocks in both pre- and post-market trading. These shares are available from 9am through to 1am the following day, Monday to Thursday, and from 9am to 10pm on Friday (all UK times).*

*The core or main US session trading hours, when the New York Stock Exchange and NASDAQ are open, is 2.30pm to 9pm (UK time). Please note: there is a three-week period during March, and one week in October, between the US and UK clocks changing for daylight saving time (DST), when the underlying US exchanges will open and close one hour earlier than usual. During these periods, 24/5 shares trading will start at midnight instead of 1am on Monday, through to 9pm on Friday instead of 10pm (UK times). Extended trading hours on US shares will run from 8am to midnight (instead of 9am to 1am the following day), Monday to Thursday, and from 8am to 9pm (instead of 9am to 10pm) on Friday.

Yes, there is a higher risk when you trade outside of the core trading session hours (when the underlying exchange is closed). There is likely to be a greater level of price volatility, due to lower trading volumes. This is because there are fewer participants than during normal market hours, resulting in less liquidity, which means that markets are more volatile as a result.

These market conditions mean that prices are likely to fluctuate more rapidly than usual, and some trades could be more difficult to execute, owing to the lower trading volumes. Our spreads may also be wider compared with the main trading session.

Our order types and execution function as normal during extended-hours trading, although we lower trading and position limits compared with the main trading session. This helps us to manage risk during periods of lower liquidity in the market. Account liquidations also function as normal, so it’s important to ensure that your account is properly funded, and that you allow enough time to deposit funds, if required.

CMC Markets Germany GmbH is a broker regulated by the German Federal Financial Supervisory Authority (BaFin). It holds funds of private clients separately from its own funds in separate bank accounts. In the unlikely event that CMC Markets Germany GmbH is unable to meet its financial obligations, the EdW would cover any claim for damages by claimants up to €20,000, provided that certain criteria are met.

CMC Markets Germany GmbH is a company authorised and regulated by the German Federal Financial Supervisory Authority (BaFin). CMC Markets complies with the requirements of §84 of the German Securities Trading Act (WpHG) regarding client funds.

There's no cost when opening a live trading account with us. You can also view prices and use tools such as charts, Reuters news or Morningstar quantitative equity reports, free of charge. However, you'll need to deposit funds in your account to place a trade.

Our income primarily comes from our spreads, while other fees, such as overnight holding costs, make a minor contribution to our overall revenue.