CFDs

CFDs Margin, leverage and assets for CFD trading

Level: Beginner / Length: 12 minutes

In this module we’ll expand on the subject of margin and leverage and look more closely at the key characteristics of CFDs. We’ll also explore ‘short’ positions and how they impact profits and losses.


See how a CFD trade compares to a stock trade.

Understanding and managing risk is imperative.


Margin is essentially ‘borrowed’ money. It gives the CFD trader the opportunity to trade on leverage. It is very important to understand that CFD trading magnifies both profits and losses. Whilst potential profits can be increased (due to the fact that the full Stocks price of the CFD position has not been funded by the trader), losses can also be higher.

  • The importance, benefits and risks of using leverage
  • How margins create leverage or gearing
  • How to calculate percentage profits and losses
  • And how to take a ‘short’ position

Saxo Bank A/S (Headquarters)
Philip Heymans Alle 15
2900
Hellerup
Denmark

International

Trade responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more

This website can be accessed worldwide however the information on the website is related to Saxo Bank A/S and is not specific to any entity of Saxo Bank Group. All clients will directly engage with Saxo Bank A/S and all client agreements will be entered into with Saxo Bank A/S and thus governed by Danish Law.

Apple and the Apple logo are trademarks of Apple Inc, registered in the US and other countries and regions. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.