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What can you trade with a CFD?

Contracts for difference (CFDs) allow you to speculate on a huge variety of markets using a single platform. Here’s some detailed information on the markets you can trade: including indices, shares, forex, commodities and more.

All trading involves risk. Losses can exceed deposits.

Indices

An index is a number that represents the price performance of a group of assets from a particular exchange. Because there is no physical asset being to trade, the only way to trade an index is via a product that mirrors its price, like a CFD. Find out more about trading indices.

CFD trading on an index means buying a contract that is equivalent to a certain amount of cash per point in the local currency of the underlying index. One contract on the FTSE 100, for instance, is worth £10 per point of FTSE movement. You can also use a mini contract, which is worth £2 per point of FTSE movement.

Our CFDs offer access to over 30 indices around the globe. You can trade 16 indices 24-hours a day, meaning you can take advantage of out-of-hours movement. For the FTSE 100, Germany 30 and Wall Street indices, you can even trade on a Sunday.

Find out more about indices trading with IG

Forex

Foreign exchange, or forex, is the conversion of currencies into one another with the aim of returning a profit. With high levels of volatility and 24-hour trading, forex is the most traded financial market in the world.

The relatively small movements involved in forex trading mean that most individual investors will trade using leverage. CFDs can be a great way of doing just that.

You’ll still trade forex in the form of currency pairs, in effect buying one currency while selling another. The value of a single contract varies dependent on the currency pair you are trading. A contract on GBP/EUR, for instance, is equivalent to €10 per point of movement in the underlying currency pair, whereas a USD/JPY contract is worth ¥1000 per point.

Mini contracts are also available. On GBP/EUR, a mini contract is equivalent to €1 per point of movement. For USD/JPY, it is ¥100.

Get more information on forex with IG

Options

An option gives you the right – but not the obligation – to buy or sell a market at a set price (known as the strike price) for a set period of time. We offer both call and put options as part of our CFD service when trading indices, forex, or commodities futures.

Buying a call or a put option effectively gives you the right to buy a CFD at a certain price, before the option expires. We also offer a special form of share option, which can give you exposure to changes in option prices without have to deal with the delivery of any actual shares.

Learn more about trading options with IG

Shares

A share is a single unit of ownership in a particular company. As the value of that company increases and decreases, so does the value of its shares. You can buy and sell shares on the stock market, but there are several benefits to trading them in the form of CFDs.

Unlike other markets, share CFDs are charged via commission instead of the spread. A single contract is typically equivalent to a single share, which means that trading share CFDs is very similar to trading shares on the market.

However, because a CFD is a contract to exchange the difference in price of an underlying asset, share CFDs can be much more flexible than traditional share trades. Short-selling shares with a broker can be a complicated process, for instance, but with CFDs it is the same as going long. You also won’t have to pay stamp duty on your returns, and can offset your losses against profits for tax purposes.

Learn more about shares trading with IG

Commodities

A commodity is a basic physical asset, traded on financial markets in the form of futures. Instead of having to trade on a futures exchange, you can use a derivative like a CFD to trade a huge variety of commodities, from popular markets like oil and gold to niche ones like carbon emissions, orange juice and rough rice.

You can use an IG CFD to trade commodities as futures, with a fixed expiry and all funding charges included in the initial spread. Alternatively, for 26 key markets, you can trade commodities without expiries. This allows you to take a short term view, paying a funding charge each time you hold your position overnight. It also means you can a keep a position open indefinitely.

An individual commodity contract will be equivalent to a set amount of cash per point of movement in the commodity, priced in its base currency. For metals trades, that means that a single contract has an equivalent amount of metal: a single gold CFD, for instance, is the equivalent to 100 troy ounces of gold. Mini contracts are also available.

Find out more about commodities trading with IG

Other markets

You can also use an IG CFD to speculate on a wide variety of other markets. These include some markets that are exclusive to derivatives, like interest rates or sectors. Alternatively, you can use a CFD to take a position on bonds, bitcoin, ETFs or even political events like general elections.

Explore the markets with our free course

Discover the range of markets you can spread bet on – and learn how they work – with IG Academy’s online course.

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