Trading
Contracts for Difference, explained clearly.
What a CFD is, how leverage works, and why it can move against you fast.
A CFD is an agreement between you and ENARA to exchange the difference in an asset's price between the moment the contract opens and the moment it closes. You never own the underlying asset, no share certificate, no barrel of oil, no coin in a wallet. You take a position on direction, and settle the difference in cash. That simplicity is the appeal, and the leverage attached to it is the danger.
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Capabilities described on this page
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Reference sections below
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Questions answered here
Why traders use CFDs
The case, stated honestly.
Go long or short
Take a position in either direction without borrowing or short-selling the underlying.
Capital efficiency
Margin frees capital for other uses, and concentrates risk into a smaller deposit.
Risk-management tools
Stops, limits, and position sizing are part of the order ticket, not an afterthought.
Broad market access
Equities, indices, currencies, commodities, and funds from one account.
How CFD trading works
Five decisions, in order.
Sequence
- 01
01 , Choose the asset
Select the market you want exposure to: an equity, index, currency pair, commodity, or fund.
- 02
02 , Choose your direction
Go long if you expect the price to rise, or short if you expect it to fall.
- 03
03 , Set your size and leverage
Your margin is the deposit required to control a larger position. Size decides how much each move costs you.
- 04
04 , Attach your risk controls
A stop-loss defines the loss you accept; a take-profit closes the position at your target.
- 05
05 , Open, monitor, close
Your profit or loss is the price difference multiplied by your position size, less costs.
Long & short
Both directions carry the same discipline.
Going long means you profit if the price rises and lose if it falls. Going short reverses that: you profit if the price falls. Short positions are not more dangerous in principle, but a rising market has no fixed ceiling, so a short can lose more than the equivalent long if it is left unmanaged.
Long, opened at the ask, closed at the bid; gains as the market rises.
Short, opened at the bid, closed at the ask; gains as the market falls.
Both, carry spread, possible commission, and overnight financing for as long as they stay open.
Leverage & margin
A worked example.
Leverage lets a small deposit control a larger position. It multiplies the result of every price move, in both directions. The figures below are illustrative and rounded, and exclude spread, commission, and overnight financing.
- 01You open a CFD position with a notional value of 10,000 at 10:1 leverage.
- 02Your required margin is 1,000. This is the deposit held against the position.
- 03The market moves 2% in your favour: the position gains 200 , a 20% return on your margin.
- 04The market moves 2% against you instead: the position loses 200 , a 20% loss on your margin.
- 05A 10% adverse move would erase the entire 1,000 margin, and you may be closed out before that.
Leverage amplifies gains AND losses in equal measure. Losses can exceed your initial deposit unless negative-balance protection applies to your account. [Available leverage limits to be confirmed and vary by instrument and jurisdiction.]
EUR/USD
Euro · US Dollar
XAU/USD
Commodity
AAPL
Apple Inc.
US 500
Instrument
Questions
Answered plainly.
Availability varies by market, account type, and jurisdiction.
No. A CFD settles the price difference in cash. You have no shareholder rights, no voting rights, and no custody of the asset. Dividend-related adjustments may apply to equity CFDs.
You can lose your entire deposit, and potentially more if negative-balance protection does not apply to your account. Never commit money you cannot afford to lose.
If your account equity falls below the required margin, you may be asked to add funds. If it falls further, positions can be closed automatically at the prevailing market price without further notice.
There is no fixed term, but overnight financing accrues each night the position stays open, which makes CFDs better suited to shorter horizons than to long-term investment.
Generally, no. They are complex, leveraged instruments. If you are new, start in the free demo account, learn how margin behaves, and only consider live CFDs once you can describe your risk precisely.
Understand it first. Then decide.
Practise CFD mechanics in a free demo account, or speak to us before you open a live position.