What is a CFD, and how does CFD trading work?

A CFD, or contract for difference, is an agreement to exchange the difference in a market’s price between the moment you open a trade and the moment you close it. You never own the currency, metal or barrel of oil itself.

How a CFD works

Say you buy a gold CFD at 2,400 and close it at 2,420. You gain the difference of 20 for every ounce your position covers. If the price had fallen to 2,380, you would lose 20 per ounce instead. CFDs are settled in cash: nothing is delivered.

Long or short

Because you trade the price rather than the asset, you can profit from a fall as well as a rise. Buying is going long; selling first is going short.

Leverage and margin

CFDs are traded on margin: you put down a fraction of the position’s value. At BBCorp, leverage is up to 1:200 on forex, metals, energies and indices, and up to 1:20 on crypto CFDs. Read leverage and margin explained before you trade.

What you can trade as a CFD at BBCorp

• Forex: 60 currency pairs.
• Metals: gold, silver, platinum and palladium.
• Energies: WTI and Brent crude oil.
• Indices: benchmarks such as the US 30, US Tech 100 and Germany 40.

What a CFD costs

The main cost is the spread: the small difference between the buy and sell price. BBCorp’s Standard and Special accounts charge no commission and are swap-free, so no overnight swap is charged on positions you hold. Live spreads are on each market page.

CFDs or owning the asset?

• With a CFD you can go short as easily as long, and you need less money up front.
• You do not own the asset, so you have no storage, delivery or shareholder rights.
• Leverage makes CFDs riskier than buying the asset outright.

Start trading CFDs

1. 1Open an account in the client portal and complete your identity check (KYC).
2. 2Fund it with one of the payment methods offered in your country.
3. 3Download MetaTrader 5, log in with the details from the portal and place your first trade.