Equities vs CFDs: What’s the Difference?

Stock trading can take many forms and many traders confuse the two main types: Equity trading (also known as trading real stocks) and CFD trading (or buying and selling Contracts for Difference on stocks).

So if you want to see the differences in terms of leverage, margin, short selling and fees – trading expert David Jones covers all these angles. Still have questions about stock trading, equities and CFD’s – let us know in the comments and we’ll get back to you.

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The information contained within the video was correct at the time of recording but may have since changed.

At Trading 212 we provide an execution only service. This video should not be construed as investment advice. Investments can fall and rise. Capital at risk. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

[dilly]

These videos for beginners are amazing, i had no idea about the differences so informative please do more videos like this!

[LukiTrade]

Very clear and proper explaining done in this video. Love it. Keep up the good work!

[McMz]

Brilliant and precised explanation! Thank you!

[EruvwuObuaya]

Thank you for explaining it so succinctly, David.

[danman]

Well explained! I've been looking for something like this. Thanks very much!

[robotcop]

What are the finance cost for overnight?

[mike-txbp]

great vid...thanks David.one question:how different the charts of a CFD stock can get with the chart of the actual stock?for example, chart of BA with CFD BA?i have seen in some instances, that both charts exactly the same but suddenly at some points on time/price one chart plummets by almost 40 to 50% and others remains the same.is it normal?

[andrewjenery]

In the video on short selling it's suggested that you can short sell stocks or shares, so equity, but here it's saying that you can't short sell equity (no shorting), only CFD's. Slightly confused.

[michaelmccarthy]

Good video mate very clear and concise thank you!!

[redcabinstudios]

Simple and Informative, encouraged to upload more videos

[darrendaz]

Oops, I dodged a bullet. Newbie, deposited £220 ‘ya I know last of the big spenders’ I thought I was buying barrels of oil lol so say at the time oil was £22 a barrel then that would be ten barrels that’s what I thought. But I was in CFD so I was in fact borrowing 90%. I panicked closed all the positions and result £42 up... I think? If you could do an example of said situation that would be great? iOS app btw. A in depth run though 212 of dummies. 👍

[murtazabasharat]

Thank you for keeping it simple to understand

[HamedAdefuwa]

literally just searched for this, perfect timing

[raajsingh]

every other video from "youtubers" have thier own agenda, these videos are fantastic, like being in a classroom.

[tebogo]

That was good and simple explanation. Thanks

[saleh.hashmi]

wait I didn't get it what do you mean by you can't short equities? that is possible in margin accounts. Could you also explain how this differs from options?

[technonessteam]

Thanks for creating this video. Helpful

[gideoncloza]

Is 212 cfd automatically at x10 or it can be changed?

[abbasmohamed]

Can you please explain, what are the commission charges for CFD?

[alexchristou]

when you own cfds what expenses excluding share price and commision
are added?