Important Requirement: To trade CFDs, clients must first complete and pass the Derivative Trading test in the Client’s Area under Qualification Tests > Derivative Trading.
What is a CFD?
A CFD (Contract for Difference) is a derivative contract through which two parties exchange cash flows or liabilities based on the price movements of underlying assets. At EXANTE, CFDs allow traders to speculate on price movements or hedge existing positions without holding the underlying asset.
EXANTE offers a broad range of CFD instruments with high liquidity and the flexibility to trade both long and short.
How to Find CFD Instruments
You can locate CFD instruments directly in the EXANTE terminal:
Instrument Tree: Open the Instruments module.
Crypto CFDs: Located under the Crypto group.
All Other CFDs: Located under the SWAP group (in the Client's Area Portfolio and Trading Platform instrument list, non-crypto CFDs are categorised under the SWAP instruments list).
Search: Use the search bar to find a specific pair directly (e.g., BTC/USD or EUR/USD).
Impact on Account and Margin
Trading CFDs differs significantly from buying stocks outright. It is vital to understand how these positions affect your balance:
Opening a CFD Position: The position value is not deducted from your cash balance at the start.
Trade Commissions: A trade commission is charged immediately upon opening and closing a CFD position.
Margin Utilisation: While a CFD position is open, a portion of your funds is locked as Used Margin. Because CFDs are margined instruments, the exact amount depends on the specific leverage rate (required margin) for that instrument.
To check the required margin percentage, right-click on the instrument and select Instrument Info from the drop-down menu.
Calculating True Cash Balance: To determine your accurate cash position, factor in the unrealised P/L of open positions (adding profits or subtracting losses) to your available cash balance:
Cash +/- Unrealised P/L = Available CashRealising P/L: Profit or loss is only realised when the position is closed. Closing at a loss will reduce your cash balance immediately.
Overnight Fees (Rollover)
All CFD positions held past the end of the trading day are subject to an overnight commission (rollover fee) to carry the position into the next trading day.
How to check rates: Find overnight rates for each instrument in your Client’s Area (Terms > Overnights) or right-click the instrument in the platform and select Instrument Info.
The Risk of a Margin Call
Because CFDs use leverage, they can trigger a Margin Call if the market moves against your position.
If your Account Value (adjusted by P/L) drops below the Required Margin, your account enters a Margin Call state. Even without spending cash upfront to buy an asset, negative P/L on a CFD position reduces your equity below the level needed to cover the required collateral.
To resolve a Margin Call: Deposit additional funds (via bank transfer) or reduce your market exposure by closing open CFD positions.
Example: A Crypto CFD Trade
Step 1: Open a position. Your cash balance remains unchanged (minus the opening trade commission), but your Used Margin increases based on the instrument's leverage requirements.
Step 2: Market movement. The market moves against you, and your Unrealised P/L turns negative.
Step 3: Margin Call status. Your Account Value drops. If it falls below the required margin threshold, your account enters a Margin Call state.
Step 4: Daily cutoff. Holding past the daily cutoff results in an overnight fee being deducted from your cash balance.
Step 5: Closing the trade. Upon closing the trade, the final P/L is settled, the closing commission is charged, and your cash balance is updated.
Risk Warning: CFDs are complex financial instruments and are not suitable for all investors. CFD trading carries a high degree of risk. Before engaging in CFD trading, you must ensure you fully understand the risks and complexities involved. We recommend you read the Risk Disclosure document, available on our Website’s Document Centre.