Bank finance articles and tips

Share CFDs are contracts that enable you to trade on the changes in price of shares, without owning the underlying shares. And, as you aren't purchasing the shares concerned, you can open a position with a deposit from just 5% of their value.

This means you can make large profits relative to your initial investment.

For instance, if you purchased 5,000 AMP shares at $4.10, you would need to outlay the whole value of the 5,000 shares, $20,500 in this situation. By contrast, trading share CFDs allows you to enter a position on the same 5,000 shares with a deposit from just 5% of the total value, or $1,025 ($20,500 x 5%)....