A group or basket of stocks are called an ‘index’ or ‘indices’. Indices are a measurement of the value (and pricing) of a specific section of the stock market, which allow traders to speculate on entire sectors at once. Grouping selected stocks or assets into an index creates a cost-effective mechanism for trading on a sector’s performance – i.e., opening a single position to trade on the entire UK100 – which tracks the 100 largest companies on the London Stock Exchange (LSE).

You can also trade on future indices like the USD index which tracks the performance of USD weighted against major currencies from across the world.

We offer commission-free rolling major & minor stock market indices from around the world, including AUS200 (Australia roll), China50, EU50 (Europe roll), DE40 (Germany roll), FR40 (France roll), HK50 (Hong Kong roll), India50, JP225 (Japan roll), ES35 (Spain roll), UK100 (United Kingdom roll) and US rolls like US500, UT100 and US30.

A rolling CFD is a CFD which is automatically extended (or ‘rolled’) to the next trading day (or value date). Unlike a futures CFD, which has a fixed expiry date, a rolling CFD position will remain open until either the client closes the position or the position is liquidated. A rolling commodity CFD works in the same way, such as our Rolling WTI Oil CFD which we call ‘USOILRoll’.

All rolling CFD positions left open at 17:00 (New York time) will be rolled over to a new value date. The roll charge is calculated by interpolating between the near and far month futures, and then adding our fees if they apply. Some rolling CFDs may pay a swap if there is a positive value in the instrument specification on our trading platform – meaning that the client is paid to hold their position on the market overnight, while others charge swaps.

We offer leverage through the use of margins, where we provide borrowed funds from our deep liquidity pool to increase your trading position. This means traders can increase their market exposure by paying a fraction of their initial investment (their deposit).

In practice, 1:20 leverage means you can invest $10 and trade with $200 – allowing for higher potential gains AND losses. Make sure you understand your risk appetite. Try to minimise your losses by using Stop Loss tools or other risk management strategies – or experiment with leverage on our risk-free demo if you haven’t traded with it before.

We offer up to 1:2000 leverage on selected products including precious metals, gold, oil & natural gas commodity CFDs.

When calculating the profit or loss of a position, it helps to use these simple formulas.

BUY positions: Profit = (Closing Price – Opening Price) * Volume * Standard Contract Size
SELL positions: Profit = (Opening Price – Closing Price) * Volume * Standard Contract Size

Please keep in mind that the profit is calculated on the quote currency, and you will need to multiply the exchange rate between the quote currency of the traded pair and the account base currency for accurate results.

For examples of how to calculate costs, please read How do I calculate costs for Entry & Exit?

Here’s a few scenarios to help you understand how to calculate entry & exit costs. Let’s use a ‘USOIL scenario’ where we assume that the initial deposit is USD$1,500 & the trading account currency is USD. The leverage is ‘1:100’, the initial margin required is USD$57, the nominal value of the position is 1000 barrels (100 Lots) & the spread is 3.6 pips.

Favourable Scenario: Client buys 100 lots of USOil at 57.018 (ASK) and the market moves up 33.6 pips within two hours. The client decides to close out their position at 57.318 (BID) which creates a profit of USD$300.

Moderate Positive Scenario: Client buys 100 lots of USOil at 57.018 (ASK) and the market moves up 16.8 pips within two hours. The client decides to close out their position at 57.150 (BID) which creates a profit of USD$132.

Moderate Negative Scenario: Client buys 100 lots of USOil at 57.018 (ASK) and the market moves down 16.8 pips within two hours. The client decides to close out their position at 56.814 (BID) which creates a loss of USD$204.

Unfavourable Scenario: Client buys 100 lots of USOil at 57.018 (ASK) and the market moves down 33.6 pips within two hours. The client decides to close out their position at 56.646 (BID) which creates a loss of USD$372.

Stress Scenario: Client buys 100 lots of USOil at 57.018 (ASK) and the market moves down 185.0 pips within two hours. The position is stopped out and the system closes out their position at 55.132 (BID) creating a loss of USD$1,886.

The financing cost for your CFD trade is referred to as ‘rollover.’ This is the interest paid depending on the size of the position and for holding a position past 23:59:59 GMT. For index CFDs, any dividend adjustments issued are included in the rollover amount as well.

The formula for financing costs (for a product such as indices) is as follows:

Closing Price of the Index * the interest rate / 100 / Number of Days +/- Dividends * Trade Size

Pay attention to open positions on Fridays. If you hold a position over the weekend on rolling commodities or indices, the rollover is charged 3 times as you’ll be unable to close a position until the markets open on Monday AM. When trading forex, most 3 rolls will be charged on Wednesdays, however some exceptions may apply.

To avoid rollover charges, make sure to close any open positions before 20:59:59 GMT.