Contracts for Difference (CFDs)

Contract for Difference (CFDs)


Direct electronic access to OTC products that lets you trade the difference between current and future pricing of a share, index or a currency-pair.


IB Share CFDs2

In addition to the potential tax benefits, trading CFDs at IB offers the following benefits:
  • Transparent, Low Commissions and Financing Rates - The starting commission rate is only 0.05% on all share CFDs, with lower rates available for active traders. Overnight financing charges start at only benchmark +/-1.5%, also with lower spreads available for larger balances. We challenge you to find a better offering.

    For more information, see our CFDs Commissions page.

  • Trade CFDs Alongside the Underlying Shares - Our Universal account lets you view and trade multiple asset types from the same screen. View the CFD ticker on one line and the underlying share ticker on the next. Trader Workstation, our desktop trading platform, supports stocks, options, futures, forex, metals, funds, CFDs and bonds all from the same account statement and same trading window.

IB Share CFDs Details & QA

  • Margin Efficiency - CFD margin requirements are generally more favorable than stock margin requirements. Retail clients are subject to a minimum regulatory initial margin of 20%. For additional details and examples please see IB ESMA Margin Implementation.
  • Efficient CFD Reference Pricing - The IB CFD price reflects the exchange-quoted price for the underlying share. IB uses its efficient Smart Routing technology to determine your CFD reference price. With other brokers, you run the risk of not getting the best possible price.

    Our clients have the ability to add quotes to the exchange book in the same way they would trading stocks. This is possible because IB will match all CFD orders immediately with a hedge-order. As a result a non-marketable CFD order will create a matching non-marketable order for the underlying share on the exchange.



IB Index CFDs3

IB Index CFDs present an opportunity to gain broad market exposure more easily than with many other instruments. IB Index CFDs also offer these important benefits:
  • Flexible Exposure to Global Markets - IB Index CFDs can be traded in lots as small as 1X the index level. Unlike the related futures, IB Index CFDs do not expire, saving rollover related costs and risks.
  • Low Commissions and Financing Rates - Depending on the index, commission rates are only 0.005% - 0.01%. Overnight financing rates are just benchmark +/-1.5%.
  • Transparent Quotes - Unlike other Index CFD providers, IB charges a transparent commission. We don't widen the spread of the related future like some other brokers. The IB Index CFD quotes accurately represent the spreads and price movements of the related future*, and there are no requotes. What you see is what you get.
  • Margin Efficiency - IB Index CFDs are margined at the same low rates as the related future, adjusted for contract size. Retail clients are subject to minimum regulatory margins of 5% or 10% depending on the index. For additional details and examples please see IB ESMA Margin Implementation.

*IB hedges all index CFD trades, and does not operate a dealing desk. Fills cannot be guaranteed in extreme markets.


IB Index CFDs Details & QA




IB Forex CFDs

  • Direct Access to Interbank Quotes - No hidden price spreading, no markup, no kickbacks. Just the combination of real time prices from 14 of the world's largest FX dealing banks plus a transparent, low commission that avoids the conflict of interest of FX platforms which deal for their own account.
  • ECN-Like Market Structure - Our order book allows you to set orders away from or between the markets, and trade with other IB clients as well as with the liquidity-providing banks.
  • Automatic Overnight Position Rolls - For positions held overnight IB applies a straightforward interest credit or charge based on the difference in the benchmark rates for the two currencies and a low IB spread.
  • FX Trader - Trade IB Forex CFDs in our optimized FXTrader, which includes real-time streaming quotes, up and down indicators, trading volumes, pending trades, executions, positions, and average price plus P&L.



Risk Warnings

  • Risk Warning

    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

    63.5% of retail investor accounts lose money when trading CFDs with IBKR (UK).

    You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Disclosures

Disclosures
  1. Legal residents of the US, Canada, Hong Kong, New Zealand and Israel are prohibited from trading IB UK-issued CFDs. Residents of Australia can trade CFDs issued by Interactive Brokers Australia PTY LTD. Residents of Japan can trade CFDs issued by IB Securities Japan (IBSJ). Singapore residents can trade CFDs except those based on underlyings traded in Singapore.
  2. Eligible customers must apply for CFD trading permissions in Account Management, and ensure that they have a market data subscription for the listing exchange of the underlying share they wish to trade as a CFD.
  3. For Index CFDs, clients must have a market data subscription for Index CFDs, which is a free subscription.