What’s the difference between shares and share CFDs?

Investing in shares allows you to take partial ownership of a company. With CFDs, you are speculating on the movements of a share price without owning the underlying asset.

When investing in shares you can only go long (buy) and you can only buy whole shares. Trading CFDs allows you to both go short (sell) and go long (buy), which means you can potentially capture profits on both rising and falling prices. At Equiti, we also allow you to trade fractions of a share as a CFD, meaning you can buy or sell 0.1 share when you trade online.

Buying shares directly requires 100% of the money up front, while trading CFDs you can use leverage. At Equiti, our margins start as low as 5% (leverage of 1:20) which means that you’ll only need 5% of the cash up front or that you can trade 20 times the number of shares with the same deposit amount. However, it’s important to always remember that when both risk and rewards are equally multiplied by using leverage.