Share trading

There's no cost when opening a live spread betting or CFD trading account. You can also view prices and use tools such as charts, Reuters news or Morningstar quantitative equity reports, free of charge. However, you will need to deposit funds in your account to place a trade. Learn about the costs involved in spread betting and CFD trading

There are a number of costs to consider when spread betting and CFD trading, including spread costs, holding costs (for trades held overnight which is essentially a fee for the funds you borrow to cover the leveraged portion of the trade), rollover costs for expired forward trades, and guaranteed stop-loss order charges (if you use this risk-management tool).

CMC Markets Germany GmbH is a company authorized and regulated by the German Federal Financial Supervisory Authority (BaFin) under registration number 154814. CMC Markets meets the requirements of Section 84 of the German Securities Trading Act (WpHG) with regard to customer funds. It keeps retail client funds separate from its own funds in segregated bank accounts.

CMC Markets Germany GmbH is a company authorized and regulated by the Federal Financial Supervisory Authority (BaFin). CMC Markets meets the requirements of Section 84 of the German Securities Trading Act (WpHG) with regard to customer funds. It keeps retail client funds separate from its own funds in segregated bank accounts. In the unlikely event that CMC Markets Germany GmbH is unable to meet its financial obligations, the EdW would cover up to 90% of the receivables from transactions (maximum EUR 20,000) provided certain criteria are met.

Our income comes primarily from our spreads and commissions, while other charges - such as overnight holding costs - make a small contribution to our total revenue.

Share trading in the underlying market is the buying and selling of company shares with the aim of making a profit. Shares represent a portion of ownership of a public company. At CMC Markets, we offer the opportunity to spread bet or trade CFDs on shares, so you don’t actually own the underlying share. Learn more about share trading.

One of the advantages of spread betting and trading CFDs is that you only need to deposit a percentage of the full value of your position to open a trade, known as trading on leverage. Remember, trading on leverage can also amplify losses, so it’s important to manage your risk.

When you spread bet or trade CFDs on shares on our platform, you don’t buy or sell the underlying share. Instead, you’re taking a position on whether you think the company’s share price will go up or down.

With spread betting, you buy or sell an amount per point movement for the share instrument you are trading, such as £5 per point. This is known as your stake. With CFD trading, you buy or sell a number of units for a particular instrument. For every point or unit that the price moves in your favour, you gain multiples of your stake, and vice versa.

As an example, say you wanted to buy £1,300 worth of Lloyds penny shares at £65 per share. For the spread betting equivalent of this trade, you would specify a stake size of £20 per point to get the same exposure as you would if you bought 20 Lloyds shares at £65 through traditional share dealing. Due to the leverage available with spread betting (5:1 in this case), you would be able to enter this position with an initial outlay of £260, instead of £1,300. However, remember that your profits and losses are based on the full value of the trade (£1,300). As a retail client, you will never lose more than the amount in your account.

Read our debate on spread betting vs CFDs and see our list of penny stocks in the UK for more information.

Share spread bets have an additional spread added either side of the existing spread. See our UK and US share spread bet examples below.

UK shares example:

CFD price/underlying sell/buy price: 250p / 255p CMC 0.1% additional spread to be added either side, widening the spread: 250p – (0.1% of 250) / 255p + (0.1% of 255) Spread bet sell/buy price = 249.75p / 255.25p

US shares example: Share price | Cost $0-15 | 1 cent (each side) $15-25 | 2 cents (each side) $25-35 | 3 cents (each side) $35+ | 4 cents (each side)

CFD price/underlying price: $25.50 / $25.58 Share price falls into bracket three: $25-35. So, 3 cents is added to both sides, widening the spread: $25.50 – $0.03 / $25.58 + $0.03 Spread bet sell/buy price = $25.47 / $25.61

Spread betting allows you to trade tax-free on a wide range of financial markets 24 hours a day, from Sunday nights through to Friday nights. Trade on your phone, tablet, PC or Mac on a wide range of instruments using leverage. Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK. Learn how spread betting works

When a stock goes ex-dividend, the value of that stock effectively falls by the dividend amount. This means if you hold a spread bet or CFD position on a company which announces a dividend, your account will be credited or debited on the day the stock goes ex-dividend.

If you were long (holding a buy position), you would have been disadvantaged by the drop in the market caused by the pay out of the dividend, so we would credit your account with the dividend amount, less any applicable dividend withholding taxes. If you were to short the stock, you would benefit from the drop in the price, so the equivalent amount would be deducted. So, overall, you don't lose or gain anything from the adjustment. There are no withholding taxes on short positions. The dividend will appear as a 'Price Adjustment' in your account history within the platform.