RISK WARNING NOTICE
Before trading Contracts for Difference, Spread Bets or Foreign Exchange (ForEx or FX), ensure you fully understand the risks involved. These products may not be suitable for all types of investor. Trading in Contracts for Difference / Spread bets / FX carries a high degree of risk and is generally considered suitable only for the more experienced investor. Leveraged products carry a high degree of risk for your capital, and in some circumstances you may be liable for a greater sum than your initial capital invested. Past performance is not necessarily a guide to future performance. Seek independent financial advice if necessary. These products are suitable only for people over the age of 18. Information and analysis produced by Pretium Securities Ltd does not constitute a recommendation or offer to make a transaction in any derivatives or securities, and is intended to be general in nature. Pretium Securities Ltd is fully authorised and regulated by the Financial Services Authority.
The past performance of any investment is not necessarily a guide to future performance. The value of shares or income from them may go down as well as up. The value of shares may rise as well as fall due to the volatility of world markets, economic conditions/data and/or changes in the rate of exchange in the currency in which the investments are denominated. You may not necessarily get back the amount you invested. If you are in any doubt about investment, you should seek independent financial advice
 
Mechanics of a CFD

A Share CFD is an undated contract that captures every aspect of share trading, except that you don't have to put up the full contract value.

Share CFDs have no fixed expiry date, giving you the freedom to close your position when you choose. You open and close your position at the actual market price, and while your position remains open your account is debited or credited to reflect interest and dividend adjustments. 

Some other markets that we offer, such as Gold or Oil, are Expiry Transactions. These have a fixed expiry date (specific to each market) and if you have not closed such a position by its expiry date, it will automatically close.

Interest and dividend adjustments

CFDs from IG Markets are designed to reflect as closely as possible an actual share trade. So while your position is open you pay or receive daily interest adjustments depending on whether you have a long or a short position.

Long positions

Your account is debited to reflect interest adjustments and credited to reflect any dividends. This mirrors the effect of buying shares in the normal way, where you no longer earn interest on the funds used to buy the shares, but receive dividends instead.

Short positions

Your account is debited to reflect any dividends and credited with interest adjustments, unless LIBOR is less than 2.5%, in which case short positions will incur a debit. This mirrors the effect of selling shares, where you earn interest on the proceeds of the sale, but cease to receive dividends.

Our interest rates are highly competitive, based on the inter-bank offered rate for the currency that the trade is denominated in, plus/minus 2.5%. If you choose to go short, you may also be charged a borrowing fee, which will be included in the interest adjustment applied to your position. Dividend adjustments are applied if you have an open position in a share on the ex-dividend date.

The best way to see how a CFD works is through an example