How a CFD works
When you open a CFD you choose an instrument — a currency pair, gold, an index, oil, a cryptocurrency or a share — a direction and a size. If you buy and the price rises, you receive the difference; if it falls, you pay it. Selling works the other way round. Nothing is delivered: when the position is closed, only the profit or loss settles to your account.
| Step | Price | Result |
|---|---|---|
| Buy 0.10 lot XAU/USD (10 oz) | 2,400.00 | Position opened |
| Gold rises and you close | 2,412.00 | +$12 × 10 oz = +$120, before costs |
| If gold had fallen instead | 2,388.00 | −$12 × 10 oz = −$120, before costs |
Prices in examples are illustrative only.
What you can trade with CFDs
One account gives access to very different markets. AlphaFX Pro lists around 1,300 instruments, all traded as CFDs from the same platform:
- Forex — 100+ currency pairs, from EUR/USD to exotics.
- Metals — spot gold and silver, plus platinum and palladium.
- Indices — 15 cash indices such as the US 30, US 500, Nasdaq 100, DAX and FTSE 100.
- Energies — WTI and Brent crude oil and natural gas.
- Crypto — 128 cryptocurrency CFDs including Bitcoin and Ethereum.
- Shares — 1,000+ share and ETF CFDs from the US, Europe and Asia-Pacific.
Why traders use CFDs
- Trade both directions: you can sell first to take a view that a price will fall.
- Leverage: you put up margin, a fraction of the position's value, rather than the full amount.
- Many markets from one account, one platform and one wallet balance.
- Small sizes: from 0.01 lot, so position size can be matched to your risk.
The costs of trading CFDs
| Cost | When it applies | How to check it |
|---|---|---|
| Spread | Every trade, on opening | The gap between bid and ask in the quote panel. |
| Commission | Raw ECN accounts only | A fixed charge per lot, e.g. $7 per lot on EUR/USD. |
| Swap (overnight financing) | Positions held past the daily rollover | Shown per instrument on the Markets page; can be a charge or a credit. |
Swaps matter more than beginners expect. On some instruments — crypto and indices especially — holding a leveraged position for weeks can cost more in financing than the spread did.
The risks you must understand
- Leverage magnifies losses as well as gains. A small move against a large position can wipe out the margin behind it.
- Margin calls and stop outs: if losses eat into your margin, positions can be closed automatically at a loss.
- Gaps: prices can jump past your stop loss over weekends or around major news, so the loss can be larger than planned.
- No ownership: CFD holders do not get voting rights or own the underlying asset.
CFDs are complex instruments and most retail accounts lose money trading them. Practise on a demo account first and only risk money you can afford to lose.
Frequently asked questions
Is a CFD the same as buying the asset?
No. A CFD only tracks the price. You do not own the share, coin or commodity, and nothing is delivered when you close.
Can I lose more than I deposit with CFDs?
Losses can be larger than you planned, especially with leverage or when prices gap past a stop. Use stop losses, keep leverage modest and check your account's margin and stop-out terms.
What leverage is available on CFDs at AlphaFX Pro?
Up to 1:100 on forex and metals, 1:50 on indices, 1:20 on energies, 1:10 on crypto and lower on share CFDs.
Can I practise CFD trading for free?
Yes. A demo account gives you virtual funds on the same platform, so you can learn without risking money.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This page is general information, not investment advice. Read the Risk Disclosure.