CFDs come with a unique set of risks. You can take control of these using our risk management tools, and ensure you're well informed with our range of educational resources.
|The risk||Why it happens||Ways we help|
|Losing more than the money in your account.||
CFDs are leveraged, meaning you only need to put up a fraction of your trade’s value to open it. So you could lose – or win – much more than your initial deposit.
You can mitigate risk and lock in profits by setting an automatic stop or limit, to define the level you'd like your trade closed at.
|Having your positions closed unexpectedly, resulting in you losing money.||You need a certain amount of money in your account to keep your trades open. This is called margin, and if your account balance doesn’t cover our margin requirements we may close your positions for you.||
Keep an eye on your always-visible running balances in our platform or app, and add more funds if they’re needed.
|Sudden or larger-than-expected losses (or gains).||Markets can be volatile, moving very quickly and unexpectedly in reaction to announcements, events or trader behaviour.||
As well as setting stops, you can also be notified of significant movement by setting a price or distance alert, giving you the choice of whether or not to react.
|Having an order (an instruction you give us, to open or close a trade for you when the market hits a certain level) filled at a different level to the one you requested.||When a market moves a long way in an instant – or ‘gaps’ – any orders you have placed may be filled at a worse level than the one you requested. This is called slippage.||
Use guaranteed stops for watertight protection against slippage. They're free to place, with a small premium payable only if your stop is triggered.
Leverage enables you to gain a large exposure to a financial market while only tying up a relatively small amount of your capital. In this way, leverage magnifies the scope for both gains and losses.
Even though you only put up a relatively small amount of capital to open a position, your profit or loss is based on the full value of the position. Therefore, the amount you gain or lose could be relatively large compared to your initial outlay.
Set a stop-loss to close your position automatically if the market moves against you. There’s no trigger charge, but no guarantee of protection against slippage – so your position could be closed out at a worse level if the market gaps.
Attach a guaranteed stop to your position, and it’ll always be closed out at exactly the price you specified.
What’s more, you’ll only pay for your stop if it’s triggered. If this happens, our guaranteed stop premiums still offer the best value in the market for most major indices and FX pairs.
Place a trailing stop when you open your trade and it will move with your profit. If the market turns, your position will close out at your trailing stop’s new level. So you can lock in profits without the need to monitor your position and adjust your stop.
Like regular stop-losses, trailing stops don’t protect against slippage.
Set a limit order in line with your profit target, and we’ll close your position for you when the price hits your chosen level.
Set price alerts, and we’ll notify you by text or email when a market reaches your specified price.
Keep an eye on the always-visible balance snapshot in our platform, and react quickly if the market moves against you, and deal out almost instantly to protect a profit or minimise a loss.
How does a stop-loss order work?
What’s meant by ‘risk’ in trading?