The Way Forward

Dynamic Rules

• CFDs give you exposure to price movement in the underlying instrument without buying it.
• More than 20 per cent of trading volume on the London Stock Exchange is on CFDs.
• You can trade CFDs through spread betting firms. Alternatively, you may use brokers, where costs can be lower but the minimum deal size is larger.
• Institutional investors trade CFDs and spread betting firms sometimes use them to lay off their own bets.
• There is no stamp duty on your purchase of CFDs, but the saving you make compared with on shares is wiped out by interest payments if you hold for longer than about 60 days.
• Foreign exchange is traded 24 hours a day and London has the largest market.
• The three largest forex markets are euro/dollar, dollar/yen and sterling/dollar (cable).
• You can trade currencies in physical money, or through derivatives.