ETFs

With spread betting and CFD trading, 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 ETFs with leverage amplifies both profits and losses based on the full trade value, so it’s important to manage your risk.

As an example, let’s say you want to put down a total of €1,000 on your ETF trade. With a margin requirement of 20% for most of our ETFs, the leverage ratio is 5:1, meaning you would enter this position with an initial outlay of €200, instead of €1,000.

Your profits and losses are based on the full value of the trade (€1,000). As a retail client, you automatically have negative balance protection, which means that you can never lose more than the available funds in your account.

When you spread bet or trade CFDs on ETFs through our platform, you don’t buy or sell the underlying ETF. Instead, you’re taking a position on whether you think the ETF price will go up or down.

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

There are a number of costs to consider when trading on ETFs, including spread costs, holding costs (for trades held overnight) and guaranteed stop-loss order charges (if you use this risk-management tool). View our trading costs for more details.

ETF trading offers better value when compared with trading each individual constituent of an ETF. There’s no cost to opening an account with us, and no minimum deposit.

Trading ETFs offers several potential benefits to traders. ETFs track a number of instruments within a single trade, so compared with trading on individual shares, ETFs can be less costly, while also offering more diversification. ETFs can also provide exposure to certain markets and assets that may not otherwise be available. Learn more about ETF trading.

All trading and investing carries a certain amount of risk, including ETF trading. However, when compared to trading on individual shares, an ETF comprises a wide range of related instruments. This diversification can help to reduce risk, because ETFs aren’t reliant on the performance of a single instrument. View our guide to managing your risk when trading.

Trading on shares focuses on trading a single company. ETFs instead provide exposure to a tracked market index, in a similar way to the S&P 500 or FTSE 100. ETFs also track a selection of assets that can include stocks, bonds and commodities, for example. Although an ETF is essentially a wrapper tracking several assets, they are still traded like a share. Find out more about how ETFs work.