CFD Trading Online

Are you new to trading or an experienced investor looking for new options? CFD trading can be the ideal starting point or perfect next step for you. When you trade CFDs, you'll gain exposure to a huge range of global markets. Forex, stock indices and commodities – CFDs will allow you to speculate on the underlying price of the assets that take your interest.

Trading CFDs can provide options that aren't otherwise available to conventional investors. The main difference is that, for CFD traders, you never actually own the asset itself. You simply get exposure to its price movements. So, why not open an FXCM CFD trading account today and enjoy the benefits that only a leading global platform can provide?

What are CFDs?

CFD is short for 'contract for difference'. It is a derivative product where your profit or loss will be based on the difference in price between your opening and closing position. These positions are typically held for a short period, which means you can react quickly when the price of an asset starts to rise or fall.

Traders can settle the final contract with a CFD broker with cash – instead of physical goods or securities. As a result, settlement is easier and faster.

By not owning the asset outright, CFD trading means you can get started with a fraction of the value involved. This form of 'leveraged trading' enables you to open positions in excess of your initial outlay. So, for example, forex CFD trading can give you 30:1 leverage with the GBP/USD currency pair – meaning you can trade £10,000 in the market with a deposit of around £334.

How to trade CFDs with FXCM

By trading CFDs, investors get all the benefits of owning the security without actually doing so. You can harness these contracts to take long or short positions, speculating on the underlying asset's future price movements. You can also use these contracts to hedge a portfolio, which is sometimes the most effective way to manage risk.

Pick an asset
First, decide on the asset you want to open a position on. FXCM is one of the leading CFD brokers – offering you hundreds of different instruments to choose from.

Take a position
The position you take will depend on whether you think the price of your chosen asset is going to rise or fall. If you think it'll rise, you want to 'go long' (buy). If you think the opposite, you'll 'go short' (sell). You'll also need to decide how much you want to invest.

Agree the contract
You'll then commit to a CFD trading contract that outlines your position – as well as any fees that may be involved. It'll also set out how much margin you require, which can differ across markets. The rate for commodities can vary compared to a major currency pair, for example.

Close your position
Your position stays open until you close it – or it reaches a defined exit point (such as a Take Profit or Stop-Loss order). Your contract might also have an expiration date. If an asset price performs as you expected, you'll make a profit on your CFD trade.

Benefits of CFD Trading


Leverage limits when opening a position can vary. In some cases, you may get leverage of up to 30:1 depending on the tradeable instrument and price volatility of the underlying asset.1 It means you could potentially generate more robust returns for a fraction of the contract cost.

However, in FX trading, leverage is the quintessential double-edged sword; it simultaneously boosts profit potential and assumed liability. During volatile periods, an unfortunate turn in price can generate losses in total loss of deposited funds for retail client. The result can be a premature position liquidation, margin call or account closure.


Our powerful, easy-to-use CFD trading platform gives you the chance to trade shares, indices, forex and commodities. It offers leveraged exposure to the world's leading markets, the most in-demand materials such as oil and gold, and the fortunes of companies like Tesla or Apple.


CFD trading is flexible. You can trade on rising or falling markets – each providing the chance to generate healthy returns no matter which direction the market moves.


This form of trading comes with low fees. When buying, a CFD trader pays the ask price. When selling (or going short), the trader pays the bid price. The spread between these two prices can vary. The size of the spread also depends on the volatility of the underlying asset.


When trading CFDs, investors are not obligated to pay a stamp duty, because these contracts are a type of derivative. As a result, investors that opt to trade CFDs may avoid the generating the tax liability they would incur by trading other securities. Investors should keep in mind that tax laws can change. Because every trader has unique circumstances, they may want to speak with an appropriate tax professional to get clarity on any questions.


You won't be bound by traditional market opening hours when you trade CFDs. Even if an underlying market such as the stock market is closed, you can still use a CFD account to trade the major stock market indices. These derivatives can be traded 24 hours a day, five days a week.

Why open an online CFD trading account with FXCM?

FXCM is a leading provider of forex trading, CFD trading and other related services. When you choose to trade with us, you get access to benefits that only a top broker can provide. We also pride ourselves on our three core values: Integrity, Agility and Customer First.

Here are some reasons to trade CFDs with FXCM:

  • Faster execution, better spreads: More than 84% of all orders had zero or positive slippage, while our average trade execution speed is just 0.019 seconds.
  • Award-winning customer service: We offer 24/5 service – on demand at any time.
  • Free premier education: You'll have all the training you need at your fingertips with on-demand lessons, webinars and real-time instruction.
    In addition, you can trade on our proprietary Trading Station – one of the most innovative CFD trading platforms in the market. Open a free demo account to start practising trading today.

Is CFD trading right for you?

Each trader is different. Just because CFD trading works for one person, it doesn't automatically mean it'll be the right option for you. That said, it can be the ideal way for you to gain exposure to different markets.

By using leverage to trade CFDs, this market exposure comes at a fraction of the cost compared to traditional investment. If you do decide to trade CFDs, however, remember they are complex instruments. They come with a high risk of losing money rapidly due to leverage.
Leverage is a double-edged sword. While it can greatly amplify your profits, it may dramatically increase your losses too. As such, trading CFDs with any amount of leverage might not be right for all investors.

Do you live in the UK or Ireland? You may want to consider spread betting your account for the tax benefit. Our guide to spread betting with FXCM will provide you with more details.

CFD Trading

How do I start trading CFDs with FXCM?

It's easy to get started with FXCM – innovative CFD trading platforms. You can open a live account and get trading within one to two business days. All we need to do first is make sure our is completed. There's no charge to open your personal account either. We'll keep you updated by email when you apply to open an account.

You can also practise trading CFDs by creating a free demo account.

CFD trading FAQs

What are contracts for difference?

A contract for difference is a derivative product. By this, we mean the contracts take their value from how well an underlying asset performs in its respective market. Such contracts are usually time-limited and exist between you, the trader, and us as a CFD broker. Check out our guide to contracts for difference for more insight.

What assets can I trade using CFDs?

With an FXCM CFD account, you can trade a comprehensive range of assets without the need to own them. You can choose from some of the most popular currency pairs, high-value shares or in-demand commodities. If the price of an asset or market is prone to go up or down, you could use CFD trading to speculate on that movement. It's your portfolio. The choice is yours.

What is the difference between CFDs and futures?

Like CFDs, futures are a way that you can trade various global markets. Both are derivatives – and both involve a contract between a buyer and a seller. The main difference is that futures will involve buying and selling the underlying asset. This is done for a set price at a set date in the future – no matter what happens to the value of the asset or market in the meantime.

Note that FXCM does not offer futures products.

What is leverage?

This is one characteristic of CFD trading that appeals to new and experienced traders alike. The concept of 'leverage' means that you have full exposure to the chosen market – but only need to put forward a small deposit to open your position.

At FXCM, we can offer different leverage based on what you're looking to trade. For one of the major currency pairs, for example, you'll get 30:1 leverage – trading with £10,000 in the forex market with an initial security deposit of as little as £334.

What is margin?

Margin is the amount you will need in your online CFD trading account to open and maintain a position. This amount will often differ based on the markets you're looking to gain exposure to. It'll be shown as a percentage too, which tells you how much you'll need to offer as a deposit.

A small cushion is also factored in so that daily/weekly fluctuations can be accommodated. At FXCM, we use a Tiered Margin system – comprising your Entry/Maintenance Margin and your Liquidation Margin. If your account falls below a certain level, your positions will all be closed.

Read our in-depth guide to what margin is.

What are long and short positions?

CFD traders have the option of going long or short when opening a position. By going long, you are ultimately entering into a contract to buy in the expectation that an underlying asset's price will go up. As for going short, you'll be choosing to sell with the expectation the price will fall.

Long CFD trade example: You choose to purchase 10,000 CFDs on an asset currently trading at US$3.50 – taking a position worth US$35,000. If the asset rises in price to US$3.65, closing the position worth US$36,500 will generate a gross profit of US$1,500.

Short CFD trade example: A seller offers 10,000 CFDs on an underlying asset priced at US$2.35. That price then drops to US$2.17 – generating a gross profit of $1,800.

Of course, a CFD trader will incur losses if either of the two example situations were reversed.

Can I use CFDs for hedging?

CFDs provide a linear payoff: a rise or decline in the underlying asset will result in an equivalent rise or decline in a trader's account balance. Also, unlike options, there are no initial premiums that need to be paid. Another benefit to hedging with CFDs is that there are fewer trading restrictions and no need to obtain access to multiple exchanges.

What costs are involved when trading CFDs?

The Spread is the difference between the Buy Price and the Sell Price for any instrument, and is displayed in pips. FXCM quotes spreads, which you can view at any time in the Dealing Rates window of your Trading Station.

There are also nightly financing debits and credits that are applicable. These debits and credits apply to all positions held at 5PM EST, just like on a Forex position. You can see how much you will pay or earn for every contract held at 5PM EST in the RollS and RollB fields in your Trading Station's Dealing Rates window. You can read more about how Finance Charges are calculated in the CFD Product Guide. Please click here to view a table that indicates how many days of rollover will be applied to open positions at 5pm EST on each trading day.

How does CFD trading make a profit?

To make a profit when trading CFDs, the price of the underlying asset has to move the way you expect it to. So, if you go long on the price of Tesla shares, you'll make a profit if the price goes up before you close your position. Similarly, you'll make a profit when you go short on global oil prices if they fall between you opening and closing your position.

If a price moves against you while your position is open, you stand to incur losses.

Do CFDs expire? How long do contracts last?

In a lot of cases, there will be no fixed expiration date on a CFD trade. So, you're able to keep a position open for as long as you choose. Your trade only closes when you choose to do so – or if it reaches an automatic trigger. For positions held overnight, however, an extra charge applies.

It's worth noting that some CFDs do have an expiration date.


Leverage: Leverage is a double-edged sword and can dramatically amplify your profits. It can also just as dramatically amplify your losses. Trading foreign exchange/CFDs with any level of leverage may not be suitable for all investors.