The advantages of CFDs vs share dealing

Aside from those two major advantages, CFDs offer a range of other interesting benefits. 

• Access to a wide range of markets
  If you want to speculate on the financial markets, you don’t need to limit yourself to exchange traded products such as stocks and ETFs. Generally, you can trade CFDs on a much wider range of assets. At Saxo, for example, we offer CFDs on stocks, stock indices, forex, commodities, options and bonds. 
• Around-the-clock trading
  When you deal shares, you are constrained by the opening hours of the corresponding stock exchange. That leaves you exposed to the risk of overnight price moves due to unexpected market events. You can trade CFDs whenever the underlying markets are open – stock CFDs for instance are available for trading when the associated stock market is open. However, CFDs on stock indices such as the UK 100, US 30 or Hong Kong 50, trade round the clock in tandem with the underlying futures contracts – so you can hedge or trade unexpected market events as they happen.
• Immediate cash settlement
  Unlike stocks, CFDs don’t have a settlement period. That means your profit or loss is calculated as soon as you close your position. This makes it much easier to enter and exit trades and allocate your resources quickly to your next position. With stock positions, on the other hand, it can take up to two days for your trade to settle and for you to gain access to your capital.
• No stamp duty
  When you trade single stock CFDs, you won’t have to pay stamp duty as you do not own the underlying asset**. You will need to pay capital gains tax, but can offset losses against your profits. 
  
  Stock CFDs are not without other costs – you’ll need to factor in borrowing costs and overnight financing. Click here for more details. 

**Tax treatment depends on individual circumstances. Tax law can change.

Risks to be aware of

Before you start trading it’s important you’re aware of that the value of equity index CFDs can go down as well as up. Losses can exceed deposits on margin products. As with other complex products, equity index CFDs come with a high risk of losing money rapidly due to leverage. In fact, 71% of our retail investors lose money when trading CFDs. You should consider whether you understand how CFDs or any of our other products work and whether you can afford to take the high risk of losing your money.

Switching between stocks and CFDs is easy

If you generally deal shares but would like to give CFDs a go, and have satisfied our appropriateness assessment, you can switch between the two products quickly and easily with Saxo. If you have a stock open in our trade ticket, you can switch straight to a CFD trade simply by clicking the CFD icon in the top-right corner. With just one click of a button, you’ll be able to add leverage and shorting to your toolbox, and take advantage of all the other benefits CFDs offer.

The No. 1 choice for stock and CFD trading*** 

We’ve won multiple awards from the likes of Finance Magnates and ADVFN for our products and platforms. But the real reason stock and CFD traders choose us is that we’ve built a well-rounded offering that provides maximum trading flexibility. We can offer you:

• Ultra-competitive prices on stocks and CFDs
• Access to a wide range of stocks from core and emerging markets
• CFDs on stocks, indices, forex, commodities, options and bonds
• Award-winning trading platforms, tailored to your experience level
• Powerful trading tools and natively designed apps
• 24-hour service in your local language

Source: ***Best CFD retail broker, 2018, Finance Magnates
                     Best Platform for the Active Trader, 2019, ADVFN Finance Awards