Share CFD trading enables you to go long or short a stock without owning the physical share. We offer all the leading Australian, UK, US, European and world shares in local denominations.
Clients do not have to put up the full value of the position and can potentially profit from both the rise and fall of the share price. However, due to the geared nature of CFDs, the potential loss relative to the initial investment is greater than for conventional share trading.
Share CFDs have no fixed expiry date, giving you the freedom to close your position when you choose. You open and close your CFD position at the actual market price, and while your position remains open your account is debited or credited to reflect interest and dividend adjustments.
Some other markets that we offer as CFDs, such as Gold or Oil, are Expiry Transactions. These have a fixed expiry date (specific to each market) and if you have not closed such a position by its expiry date, it will automatically close.
Interest and dividend adjustments
CFDs from IG Markets are designed to reflect as closely as possible actual share trading. So while your CFD position is open you pay or receive daily interest adjustments depending on whether you have a long or a short position.
Long share CFD positions
Your account is debited to reflect interest adjustments and credited to reflect any dividends. This mirrors the effect of trading shares conventionally, where you no longer earn interest on the funds used to buy the share CFDs, but receive dividends instead.
Short share CFD positions
Short positions: Your account is debited to reflect any dividends and either credited or debited with interest adjustments, depending on the relation of the current interbank offered rate to our financing fee. This mirrors the effect of selling share CFDs, where you earn interest on the proceeds of the sale, but cease to receive dividends.
Our interest rates are highly competitive, based on the inter-bank offered rate for the currency that the trade is denominated in, plus/minus 2.5%. If you choose to go short, you may also be charged a borrowing fee, which will be included in the interest adjustment applied to your position. Dividend adjustments are applied if you have an open position in a share on the ex-dividend date.
The best way to see how a CFD works is through a detailed example.