Commission-free US shares CFDs

Stocks, also known as shares or equities, are securities traded in a stock exchange. CFD share trading (otherwise known as CFD stock trading) means buying and selling CFDs on the shares of companies listed on a stock exchange.

CFDs allow traders to speculate on the price of stocks or equities without directly owning shares and without the responsibility of being a direct shareholder. Share CFDs are available for a wide variety of industries, so you can tap into your knowledge of specific businesses or diversify your portfolio. 

Wondering how to buy shares CFDs? If you believe the stock price will rise, go long by placing a buy CFD trade. If you predict the price will fall, go short by placing a sell CFD trade. If the stock prices move to the direction you predicted, you’ll earn a profit.

Since CFD stock trading is leveraged, you can deposit a margin or a fraction of your total exposure to start trading. With a 1:20 leverage, a margin of $200 lets you place a trade worth $4,000. It’s important to remember that CFD stock trading can magnify both profits and losses, which are calculated not against the margin but against the total value of your position.

When you invest in stocks, you buy shares and this gives you partial ownership of a company. When you trade CFDs on the shares of a company, you speculate on the price movement of those shares without owning the underlying stock.

When investing in shares, you can only go long (buy) and you can only buy whole shares. When trading contracts for differences on shares, you can go long (buy) or go short (sell), which means you can potentially capture profits on both rising and falling prices. At Equiti, we also allow CFD trading on fractional shares. In other words, you can buy a fraction of a share as a CFD, meaning you can buy or sell 0.1 share when you trade online.

Buying shares directly also requires 100% of the money up front, while CFD trading allows you to use leverage. At Equiti, our margins start as low as 5% (leverage of 1:20), which means that you need to pay only 5% of your trade up front. In other words, you can trade up to 20 times the number of shares with a small deposit. However, it’s important to remember that both risk and rewards are equally magnified when you use leverage.

Arguably the most popular tool for reducing risk, stop loss orders are designed to limit loss on a position that’s taken an unfavourable direction. A stop loss order is essentially a request to close your position once the asset reaches a particular price. This is helpful as it means your trades need less monitoring, and it can help limit losses, particularly in volatile markets.

However, please note that a stop loss order does not guarantee closure at your indicated stop-loss price. Positions may be affected by price gaps over market closures, data release or other economic factors.

Trading CFDs is based on the speculation that the price of a financial instrument will increase or decrease, which creates potential to maximise returns. However, there’s no guaranteed strategy or market that will always deliver profit. If your current broker says otherwise, check if they’re regulated!

We always encourage our clients to risk only what they can afford to lose. Markets are known to be unpredictable and leverage can equally amplify both losses and profits.