What is CFD Trading? Tips & Strategies

XTB as a group has more than 650,000 active CFD clients, which makes XTB one of the worlds biggest retail brokers. The spread is $0.10, commission is $10 round trip, and overnight cost is $1 per day. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If it’s money and wealth for material things, money to travel and build memories, or paying for your child’s education, it’s all good. We know that you’ll walk away from a stronger, more confident, and street-wise trader. People come here to learn, hang out, practice, trade stocks, and more.

Trading in XTB CFDs using Short and Long Positions

• Our live streams are a great way to learn in a real-world environment, without the pressure and noise of trying to do it all yourself or listening to “Talking Heads” on social media or tv.
• This index tracks the volatility of the S&P 500 index and the volatility spikes when investor sentiment declines and panic ensues leading to selling of assets.
• You can learn the particulars of each XTB CFD by going to the XTB page that is dedicated to the contract specifications.
• Nevertheless, a sudden shift for the worse in market conditions can occur, and this can have an effect on the return on your XTB investment.

If you are unable to come up with the funds, it is possible that XTB will close all of your open trading positions, and you will be responsible for any losses that occur as a result. You could sell a contract for difference (CFD) on XTB that is based on Gas if you think the price of gas is going to go down on XTB. You will make a profit when you close the short position if the price of Gas goes down on XTB, but you will incur a loss with XTB if the price of Gas goes up. The profit or loss from a XTB position is not realised until after the XTB position has been closed, regardless of whether the position was long or short with XTB. Some XTB CFD financial instruments may not be available on all countries. The ability to go long or short along with the fact that CFDs are a leveraged product makes it one of the most flexible and popular ways of trading short term movement in financial markets today.

XTB Interest-Earning Savings Account

CFDs are financial instruments different from shares, indexes or bonds. As the name suggests, a Stop Loss order can protect against deepening losses, the position will be closed automatically when the price goes below your specified level. Another type of stop loss order is a trailing stop loss, which tracks the price of an instrument at a distance set by you.

After the XTB trade has been opened, there is a necessary amount of XTB maintenance margin that must be paid. Should you be unable to respond to this XTB margin call by making an additional deposit of funds, XTB may decide to close your position. Such data lets us improve the user experience of our web service. This means you gain a much larger market exposure for a relatively small xtb cfds initial deposit. In other words, your return on your investment is significantly larger than in other forms of trading. By pressing the BUY or SELL button you will make a buy trade if you bet on the rise, or a short sale if you bet on the fall of prices.

Is CFD trading allowed in the UK?

Your account balance cannot be negative because of negative balance protection, so you can’t lose more money than you deposited on your account. CFD trading is available when the underlying instrument is available for trading and quotations are ongoing. In the case of shares, trading is open when the exchanges are open, quotations end at fixed and known times. Of course CFD trading, just like any other form of capital investment, has its specific advantages and disadvantages. A Take Profit Order, on the other hand, will allow you to automatically close a profitable position at a price level that you deem appropriate.

easyMarkets Broker CFDs

With this position you can make money when the prices of the instruments go down. However, CFD trading allows you to trade under all conditions, even in the face of falling prices, but you have to remember – the risk is always very high and prices can always go up. Due to the fact that you are only trading a contract for difference, you can also bet on the stock price going down if you think it is overvalued or you expect a sudden drop in its price. The market is characterised by high volatility and the prices of instruments constantly go up and down.

• Trade from anywhere with XTB on one of the most sophisticated platforms in the world.
• You open a short position on the platform in the same way as a long position.
• Unlike options, CFDs do not have a strike price or expiration date.
• If Barclays shares fall 10% to 252p, the value of the position is now £25,200.
• We provide our members with courses of all different trading levels and topics.

As one of the world’s most popular trading platforms, MT4’s strength is in its simplicity. MT4’s benefits include a wide variety of inbuilt analytical tools and an ever growing community enabling you to add indicators, oscillators and countless automatic strategies. CFDs are not suitable for investors who have a low risk appetite and wish to invest over the long term.

Confirm and submit your trade.

That’s a 50% return on your investment, compared to just a 10% return if the shares were bought physically. It’s important to treat day trading stocks, options, futures, and swing trading like you would with getting a professional degree, a new trade, or starting any new career. One of the most important factors in choosing a brokerage platform is the commission fees for trading. High fees can eat into your profits and deplete your gains over the long term. Luckily, XTB charges minimal fees for trading any of its instruments.

Using XTB CFDs to sell short is accomplished in essentially the same way as using them to buy XTB long positions. However, rather than buying contracts to open your XTB position, you will be selling the contracts. By doing so, you will open a XTB trade that results in a profit if the price of the underlying market falls, but a XTB loss if the price of the underlying market rises. In exchange for this, you receive a stock certificate, legal documentation that certifies ownership of shares. In other words, you have something physical to hold in your hands until you decide to sell them, preferably for a profit.

XTB CFD Risks in a Market that is Volatile

Additional, basic information about each of them can be found in our xStation platform, in the ‘instrument information’ tab. Margin is the sum of your margins – the total amount taken to open positions in CFDs. You open a short position on the platform in the same way as a long position. Instead of clicking on the green BUY button you select the red SELL button.