Trade Tesla, Apple & More - Big Market Moves, Zero Share Ownership!

How Stock CFD Trading Works

Stock CFDs (Contracts for Difference) are financial derivatives that allow investors to profit from stock price movements without owning the actual shares. Here's a breakdown of how it works:

Core Concepts
  • No Stock Ownership – You don’t buy or sell actual shares. You’re trading based on price movements.
  • Two-Way Trading – Go long (buy) if you expect prices to rise or short (sell) if you expect a drop. Profit in either direction.
  • Leverage Trading – Control a larger position with a smaller deposit. (e.g., 5:1 leverage means $1,000 controls $5,000 in stock CFDs.)
Trading Process

Choose a Stock

Trade popular global stocks like Apple (AAPL), Tesla (TSLA), or Tencent (0700.HK).CFD prices usually mirror the real-time spot market, with slight spreads.

Pick a Direction

Buy (Long): Expecting the stock to rise → Buy low, sell high.

Sell (Short): Expecting the stock to fall → Sell high, buy low.

Set Trade Parameters

Lot Size: 1 lot = 1 or 100 shares, depending on platform rules.

Leverage Ratio: Typically 1:2 to 1:20 (subject to regulations; e.g., ESMA limits leverage to 1:5 for retail clients).

Stop Loss/Take Profit: Set automatic exit points to manage risk.

Manage & Close Position

Real-time P/L:

Long P/L = (Close Price – Open Price) × Quantity

Short P/L = (Open Price – Close Price) × Quantity

Overnight Costs: Long positions incur financing fees; short positions may earn small interest.

Key Rules & Fees
  • Leverage – Magnifies both profits and losses. (e.g., with 5:1 leverage, a 10% stock move = 50% gain/loss.)
  • Spread – Difference between buy and sell price. (e.g., AAPL $170.00/$170.10 → spread = $0.10)
  • Commission – Some platforms charge by volume (e.g., $0.02/share); others offer commission-free trades with wider spreads.
  • Overnight Fees – Long positions pay interest (base rate + markup); shorts may receive interest.
  • Dividend Adjustments – If holding past ex-dividend date, longs receive a dividend credit, shorts pay the equivalent (auto-adjusted).
  • Margin Call / Auto-Close – If your equity falls below a certain level (e.g., 50% of required margin), your position may be closed automatically.
Pros & Risks

Pros

No need to hold shares—avoid stamp duty (e.g., in the UK) and traditional brokerage requirements.

Access to global stocks with high liquidity.

No T+1 settlement delay—trade instantly.

Useful for hedging existing stock portfolios.

Risks

Leverage Risk: Losses can exceed your initial deposit (look for brokers with negative balance protection).

Overnight Fees: Costs add up for long-term positions.

Liquidity Risk: Spreads may widen for less liquid stocks.