How to trade CFDs

Explore how CFD trading works – from opening an account to closing your position.

When you trade CFDs, you buy a certain number of contracts on a market if you expect it to rise, and sell them if you expect it to fall. But the finer details of CFD trading can often be a little more complicated – especially since platforms and functionality vary from provider to provider.
 
Here are the four steps you’ll need to follow to start CFD trading. To learn everything you need to know about placing your first CFD trade, take a look at our guide below.
 
  1. Create and fund an account
  2. Find an opportunity
  3. Open a position
  4. Monitor and close a position

1. Creating and funding an account

Opening and funding a CFD trading account with IG Bank is a simple process. Start the account opening process here.

You can add funds to your account using your credit or debit card, or via a bank transfer. See our page for a step-by-step guide on how to do this. After we’ve verified your identity, your account should be live and ready for your first trade.

If you'd prefer to build your market confidence in a completely risk-free environment, you can open a demo account and practise with CHF 20,000 of virtual funds.

2. Finding an opportunity

Now that you’ve opened and funded your account, it’s time to find your first trade. One of the biggest benefits of trading with CFDs is the access to a huge variety of markets, and trading with IG Bank is no exception. You can access over 15,000 markets via a single platform, including:

  • Indices
  • Shares
  • Forex
  • Commodities
  • Options
  • Digital 100s

For a more detailed look at all the markets you can trade using CFDs, take a look at what can I trade with a CFD?

With so much choice on offer, identifying your first trade can be tough. If you’d like some help identifying which trade is best for you, take a look at our wide range of free resources and tools, like:

  • An economic calendar to help you stay ahead of events, with alerts to make sure you don’t miss out on opportunity
  • Extensive news, analysis and videos examining what’s moving the markets each day
  • Free essential charts for analysing market movements
  • Market data featuring insight into what IG Bank clients are trading, as well as up to date company news and figures
  • Our market screener, which you can use to find shares according to company fundamentals, location, index or sector
  • Signal centre, which highlights potential trades according to significant trends or patterns identified by PIA-First analysts or Autochartist technology

We also offer premium tools for advanced traders like direct market access (DMA), which allows you to see and place trades directly on the market, or access to ProRealTime’s technical indicators and automated dealing. These features may incur a charge.

3. Opening a position

Once you’ve decided which market you’d like to trade you should be ready to open your first position. Trading an IG CFD means you can adjust your expiry, deal size, trade direction and any stops or limits.

Expiries

Before you open your position, you can decide how long you might want to keep it open for. A cash CFD is designed for short term trading, and will incur an overnight funding fee if you want to keep it open after the end of the trading day. Forward contracts are available with different expiries, and will have all overnight funding charges built into the spread.

Size

You can also choose how many CFD contracts you’d like to trade. The value of a single CFD contract changes dependent on the market, and is measured in contract size per point. As well as full contracts, we also offer mini-contracts on several key markets – so you can be as prescriptive about the size of your position as you need.

Buy and sell prices

We’ll always quote two prices on a CFD position, called the buy and sell price. You can trade at the buy price if you want to open a long trade, and at the sell price if you want to open a short trade.

The difference between the two prices is called the spread. Most trades with IG Bank are charged via the spread: with the exception of shares, which incur commission.

Stops

Stops offer a way of limiting the potential loss you can incur from a single trade by automatically closing your position once it hits a certain level. We offer a range of stops – including basic, guaranteed and trailing – to give you full control over when you exit your trade.

Alternatively, you can close your position manually by trading in the opposite direction to how you opened it. So if you opened your position at the buy price, you’d close at the sell price. Open at the sell price, and you close at the buy price.

4. Monitor and close a position

Once you’ve taken your position, your profit or loss will fluctuate in line with the underlying market price. You can monitor all your open positions in real time on the trading platform, as well as edit your stops and limits and respond to new signals.

When you’re ready to take your profit or cut your losses, you can do so manually by placing the same trade you originally placed, but in the opposite direction. So if you opened your position by buying, you’d close by selling the same amount of contracts at the sell price – and vice versa. 

Your profit or loss is calculated by multiplying the amount the market moved by the size of your trade in pounds per point.

Open an account now

It’s free to open an account and there’s no obligation to fund or trade.

Contact us

Our helpdesk is open 24 hours a day from 9am Saturday to 11pm Friday.