A Share CFD is an undated contract that captures the benefits of share trading, but at a fraction of the cost.
Share CFDs have no fixed expiry date, giving you the freedom to close your position when you choose. With IG Markets you open and close your CFD position at the guaranteed market price - there is no spread to worry about. While your position is open your account is debited or credited to reflect interest and dividend adjustments.
Interest and dividend adjustments
CFDs from IG Markets are designed to reflect as closely as possible an actual share trade - though because you don't take actual ownership of the stock, you don't get voting rights.
While your CFD position is open you pay or receive daily interest adjustments depending on whether you have a long or a short position.
Long Share CFD 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 Share CFD positions
Short positions: Your account is debited to reflect any dividends and either credited or debited with interest adjustments, depending on the level of the current interbank rate in relation to our financing fee. 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 interbank offered rate (eg SIBOR for Singapore) 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 share CFD trading works is through an example.
Please note that trading CFDs is a geared investment strategy, carrying a high risk to your capital. Only trade with money you can afford to lose. Please see our Risk Disclosure Notice for more details.
