LSE Spreads

CFD Account Types

In contrast to many CFD providers, we give you a selection of two different types of CFD trading account to choose from. You can select the one that is most appropriate for your approach to trading and the strategy that you are looking to adopt.

Consolidated Accounts

The "Consolidated Account" operates consolidated position keeping. This means that your open positions are netted off against each other automatically and your profits/losses are realised when you execute the opposite trade to your open position.

If, for example, you bought a CFD based on Microsoft shares, and therefore have a long trade open in Microsoft shares and you then subsequently sell a CFD on the Microsoft shares of the same size, with a Consolidated Account, the "sell" or short trade will automatically close off the original open "buy" or long trade.

Consolidated Accounts are appropriate for clients who are likely to trade a single instrument frequently.

Single Positions Accounts

The "Single Positions Account" operates single position keeping. Each trade is treated as an individual open position, which means that your open positions will not be netted off against each other unless you decide that you wish this to happen on a case by case basis. This means that you can keep each position in a given instrument open separately

If you buy a CFD based on Microsoft shares and then subsequently enter into an opposite trade to sell a CFD on Microsoft shares, both these positions will be kept open. They will not net off against each other until you decide that you wish them to.

Single Positions Accounts may be appropriate for more experienced traders who might, for example, be holding open trades to hedge an existing portfolio.

Example:

On day 1 the following trades are placed:

• Buy 10 FTSE @ 5965
• Buy 10 FTSE @ 5912
• Sell 10 FTSE @ 5975

Consolidated Account

Based on the FIFO method (first in, first out), the first 10 FTSE contracts bought at 5965 would therefore be sold when the 10 contracts are subsequently sold, leaving the 10 contracts bought at 5912 open

Single Positions Account

You would hold open the three separate trades until you decided to close one or more of these. The average price for this position would instead be 5951, and the positions would be on your positions tab on the dealing system.

In this view you can see each trade placed as an open position, giving full clarity of the trade price. It would then be your choice entirely which positions you might want to match off against each other.

If you would like further information on the two types of account, please see here for the User Guides.