How does spread betting/trading CFDs on indices actually work?
When you spread bet or trade CFDs on indices on our platform, you don’t buy or sell the underlying index. Instead, you’re taking a position on whether you think the index will go up or down.
With spread betting, you buy or sell an amount per point movement for the index instrument you’re trading, such as £5 per point. This is known as your stake. With CFD trading, you buy or sell a number of units for a particular instrument. For every point or unit that the price moves in your favour, you gain multiples of your stake, and vice versa.
While you can trade on leverage, your profits and losses are based on the full value of the trade. As a retail client, you will never lose more than the amount in your account.