Share CFDs and cryptocurrency CFDs

The commission model

Under the commission model on share CFDs, you pay a charge when you open a trade and when you close it. The charge is either a percentage of the trade’s full value, its notional value, or a fixed amount per share. You pay it on top of the exchange spread, and your provider passes that spread on to you. Providers usually hedge a share CFD by buying or selling the real share, covering their own risk. On this model the commission is how they earn. Some providers charge no commission on share CFDs and widen the spread instead (how a trade works). A minimum commission per trade makes small trades expensive for their size. The costs and fees page compares commission with spread-only pricing.

Dividends and corporate actions

Your provider turns dividends and other company events, known as corporate actions, into adjustments on a share CFD. A share starts trading without its next dividend on the ex-dividend date, and its price falls that day. To make up for that, your provider credits the dividend to a long trade, sometimes less a withholding tax, and charges it to a short one. A long trade is one that gains when the price rises. Because the adjustment cancels the drop, the result is neither a gain nor a loss before costs, apart from any tax withheld from a long trade. An index CFD works the same way.

When a share split or consolidation happens, the number of units and the price both change in proportion. A rights issue, takeover or delisting is dealt with according to your provider’s terms. Those terms may include closing your trade at the provider’s price. None of these adjustments gives you the rights a shareholder has (what are CFDs).

Borrow costs on short positions

Borrow costs on a short share CFD arise from how your provider covers its own risk. It hedges your short position by borrowing the share. The lender charges a fee, and your provider passes that fee on to you as a daily charge on top of financing. On heavily shorted or thinly traded shares, the fee can be large and can change daily. If no shares can be borrowed, your provider may refuse new short positions or close existing ones. The platform shows whether a share is available to short and at what borrow rate.

Earnings gap risk

Earnings gap risk on a share CFD stems from company results. These are usually published when the market is closed. The results can move the share by a large part of its value at the next open, and can jump straight past any stop inside the gap. Where the company that opens your account is regulated in the EU or the UK, a 5:1 cap applies. At that cap, a 20 % move is enough to wipe out your whole margin, the deposit backing the trade (ESMA Decision (EU) 2018/796). That’s why providers often raise margins before an announcement (risk management).

The 2:1 cap

The 2:1 cap on cryptocurrency CFDs is the lowest leverage the EU retail rules allow for any asset class, and it means an initial margin of 50 %. ESMA set the cap because crypto prices swing so much, a trait called volatility, and because crypto is hard to value (ESMA Decision (EU) 2018/796). The cap applies if the company that opens your account is regulated in the EU. A 50 % move against a fully leveraged trade wipes out the margin. The leverage and margin page sets this cap beside the others.

Weekend trading

You can trade crypto CFDs at the weekend because the crypto markets never close. Index and share CFDs carry a weekend gap, but here you get continuous exposure instead. Your trade has no closed market to protect it. Financing builds up every night, including over the weekend. With few buyers and sellers, the thin weekend trading in crypto markets means low liquidity, and you’ll see wider spreads and larger price swings (crypto CFDs, trading hours).

Wide spreads and high financing

Wide spreads and high financing are the two costs that make holding a crypto CFD expensive. The spread, as a percentage of the price, is usually several times the spread on a major currency pair. That’s because crypto trades across many separate venues and its price swings hard. On long and short trades alike, providers set the financing rate well above the benchmark rate because there’s no interest-rate gap to build it from (costs and fees).

Why regulators restrict crypto derivatives

Regulators restrict crypto derivatives for retail clients because crypto prices move sharply, no dependable method exists to value them and market abuse and fraud are common in crypto markets. There’s also evidence that retail clients don’t understand the products.

The FCA gave those reasons when it barred firms acting in or from the UK from selling, marketing or distributing crypto derivatives to retail clients. It did the same for exchange-traded notes linked to cryptoassets. Exchange-traded notes are listed investments that track a price. The ban came into force on 6 January 2021 (FCA PS20/10).

Crypto CFDs are still available at 2:1 when the company that opens your account is regulated in the EU. ESMA reminded firms in February 2026 that perpetual futures on crypto-assets, contracts that never expire, fall under the CFD rules (ESMA, 24 February 2026). So the same leverage limits and the same risk warning apply at an EU company (rules by region). The CFD rules also bring in margin close-out: your provider closes your trades when your account runs too low. And the rules bring in negative balance protection, which stops you losing more than you paid in.