Harness the power of volatility
Take advantage of rising and falling markets by investing in assets using CFD for short- to medium-term
Use CFD with the wisdom of 30M users and trade stocks, commodities, or indices on an easy-to-use platform
Take advantage of rising and falling markets by investing in assets using CFD for short- to medium-term
It’s empowering
Free up your money by using a smaller margin with leverage
It’s friendly
An easy-to-use platform and a competitive, simple, fee structure
It’s trusted
Millions of users worldwide have executed over 370M trades on eToro so far, and counting
It’s social
Get ideas and share strategies with a thriving 30M strong investing community
CFD trading is a method of trading the value of an underlying asset. The trader and broker enter into a contract where they agree to exchange the difference between the price of an underlying asset at the opening and closing of the trade. That is how the CFD gets its name, as it stands for “Contract for Difference” of price.
CFD trading allows investors to leverage their capital and provides many of the benefits of trading assets such as stocks, commodities, indices and crypto without actually owning the instrument or investing large sums of capital.
To learn more about CFD trading, click here.
The trader chooses an asset offered as a CFD by the broker. It could be a stock, an index, a currency or any other asset to which the broker provides access.
The trader opens the position and sets parameters such as whether it’s a long or short position, leverage size, invested amount (margin), stop-loss and other parameters, depending on the broker.
The broker will then state what the opening price for the position is, and whether or not additional fees (such as overnight fees) are involved.
The position is opened and remains open until either the trader decides to close it or it is closed by an automatic command, such as reaching a Stop-Loss or Take Profit point or the expiration of the contract.
If the position closes in profit, the broker pays the trader for the difference. If it closes at a loss, the trader pays the broker for the difference.
To learn more about how CFDs work, click here.
Sometimes traders may wish to gain a certain level of market exposure with minimal equity as part of their investment strategy. Trading with leverage means using capital which is a fraction of the position opened.
Leverage is applied in multiples of the capital invested by the trader, for example 2x, 5x, or higher. Leverage may be applied to both buy (long) and short (sell) positions.
It is important to note that any profits and losses will be calculated according to the total size of your position, not the capital invested. In other words, if you invest $100 in a position and apply 5X leverage, the total size of your position is $500 and, as such, profit or loss will be calculated according to the latter sum.
Using leverage enables you to lower the amount of capital you need to invest in order to trade (also called “margin”).
Changing your leverage level dictates how much margin is required to support your position.
If the market moves against you, your margin will cover your loss until the point your Stop- Loss is hit.
Using leverage requires a high level of involvement, as it is advisable to monitor your portfolio frequently.
For more information on leverage, click here.
Any financial investment involves risk, and CFDs are no different. CFD assets traded without leverage have the same risk as those assets traded directly. On eToro, for example, you can invest in any asset without applying any leverage. However, when trading CFDs with leverage, it is important to bear in mind that any losses, as well as profits, will be calculated according to the total size of your position, and not the capital invested. In other words, if you invest $100 in a position and apply 5X leverage, the total size of your position is $500, and, as such, profit or loss will be calculated according to the latter sum.
Using leverage requires a high level of involvement, as it is advisable to monitor your positions frequently. To learn more about how leverage works, click here.