To open a CFD position, you need to deposit only a fraction of the full value of your trade, usually from 2% -30%. CFD trading can offer the possibility of a much better return on your initial investment than you would receive if paying for the trade in full. Conversely, losses will also be amplified, as shown in the example below
CFDs provide an alternative way to trade. Waiting to set aside the capital to buy a share portfolio can mean missing valuable trading opportunities. CFDs allow you to be involved in the market now. And with only a proportion of your capital invested using CFDs in comparison to physical shares, you have the freedom to use the difference for other investment opportunities – making your money work smarter.