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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

Shares trading definition

Shares trading is the buying and selling of company stock – or derivative products based on company stock – in the hope of making a profit.

Shares represent a portion of the ownership of a public company, and make up its worth or market cap. The trading of shares is one of the most popular and best-known markets in investing, alongside forex and commodities.

There are two main methods of profiting from the price movements of shares: non-leveraged trading (share dealing), and leveraged trading.

Non-leveraged

Most shares trading takes place on stock exchanges, where public companies are listed. Only registered participants are allowed to trade directly with stock exchanges, so the majority of traders will do so via a stockbroker. IG’s execution-only share dealing service enables you to buy and sell shares using our platform.

Leveraged

As well as trading on exchanges, it is possible to use derivative products like CFDs and spread bets to participate in the shares market. These allow for more flexibility than traditional trades, with the opportunity to take long or short positions to trade in both bull and bear markets.

These products operate on leverage, to increase exposure on a position without the use of more capital. However, this means spread betting and CFDs also carry greater risks: including the risk that your losses could exceed your deposits.

An investor’s guide to spread betting

Make your market knowledge go even further with our free three-part guide to spread betting.

  • Discover the benefits and risks of spread betting on the markets

  • Take a closer look at our dealing platform and risk-management tools

  • Learn how to identify and act on new opportunities

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