Equity Contracts for Differences.

Equity CFD's are synthetic equity positions and are one of the best ways to trade shares long or short on margin. Trading a CFD is very similar to normal share dealing, with a price very similar to the underlying shares. However you do not have to pay for the full value of the shares. Instead you put up a deposit (margin), which is normally 10% of the contract value depending on the type or volatility of the share. While your position remains open, your account is debited or credited to reflect interest and dividend adjuaspents. If you are long, you receive dividends and pay interest; if you are short you do the reverse. If the price moves against you, you may have to post more margin, and vice versa.
Unlike traded equities, equity CFDs have no settlement period and you can keep the position open indefinitely, providing there is enough margin in your account to support your position. CFDs are derivatives, and can be very high risk, so they are only available to clients who have the experience and resources to deal in these types of Investments.

Simplicity: speed & quality of execution

Buying and selling CFD's is really no different to buying or selling shares. An equity CFD transaction will typically be executed at the same speed and price as a simultaneous and identical trade in the underlying equity.

Visibility: mirrors underlying performance

The value of an open equity CFD position is based on the price of the underlying equity.

Flexibility: profit from falling as well as rising markets

Unlike physical assets or covered warrants, CFDs can be sold short, without owning or borrowing the underlying instrument.

Leverage: magnify profit (or loss) potential

CFD's allow sophisticated and bold investors to back an Investment view on a geared exposure basis

Anonymity: trade discreetly

Equity CFD trades do not result in transfer of ownership, so the usual stock exchange disclosure rules do not apply, and the trades are not published.

Risk management: hedge market exposure

In anticipation of a fall in a share price, a short position can remove or reduce risk without loss of voting rights.

Dividends.

Following a purchase of an equity holding, an investor is entitled to receive any dividends paid by that company. Although not the beneficial owner of the shares, a holder of a l ong CFD is entitled to receive a cash sum similar to any dividend declared by the company while the position is held (less any tax or administration charges). Conversely, the holder of a short CFD is required to pay a sum equal to the gross dividend, irrespective of whether he holds the underlying position. The deciding date for the entitlement to a dividend is the same as the ex-dividend date declared by the underlying company.
Clients are advised to check the dates of any impending dividends before entering into CFD positions.