Managing your account currency: the difference between spread betting and CFDs
Although spread betting and CFDs have much in common, one important difference is currency.
When you are spread betting with InterTrader, your trading currency is always sterling (GBP). All of your spread betting trades, margin payments, and profits or losses will be made in pounds.
When you open a CFD account you can select your trading currency of choice, i.e. sterling, dollars or euros. But, unlike a spread betting account, all your trades are then made in the currency of the underlying market you are trading.
So if you are trading UK equities your position is made in sterling, if you are trading Germany 30 your trade is made in euros, and if you are trading US Crude your trade is made in US dollars. Other commodities such as copper, gold, silver, cocoa and orange juice are also traded in dollars.
Your margin requirements are based on the underlying market currency and then converted into your account currency. So if you trade CFDs on the Wall Street index, your exposure and margin is calculated in US dollars, then converted into British pounds.
Any interest or dividend adjustments are calculated in the underlying currency and then converted into your base currency at the time they are made. Likewise, when you close your position, your final profit or loss is converted back into your base currency.
Any funds you want to withdraw from or deposit into your account are made in your chosen account currency. To reiterate, none of this affects spread betting accounts which are always traded in sterling.
Do we have a currency conversion charge?
Any credit or debit to your account is converted to your base currency at the prevailing spot rate and at no extra charge: you will not incur a currency conversion charge.
How do I change the base currency of my CFD account?
If you wish to change the base currency of your CFD account please contact us at firstname.lastname@example.org or +44 (0)20 3364 5189.
You should under no circumstances consider the information and comments provided as an offer or solicitation to invest. This is not investment advice. The information provided is believed to be accurate at the date the information is produced.