How does spot trading work with IG?
With us, you can trade spot prices across forex, commodities, indices, shares and cryptocurrencies using spread bets and CFDs. Here is how the process works:
1. You select the market you want to trade, for example EUR/USD or gold, and choose a position size.
2. You take a long position (buy) if you expect the spot price to rise, or a short position (sell) if you expect it to fall.
3. Your profit or loss is determined by the difference between the price when you open the position and the price when you close it, multiplied by your position size.
4. For positions held overnight, a small funding cost (overnight financing charge) is applied. This reflects the cost of maintaining a leveraged position beyond the end of the trading day.
5. You can manage risk using stop-loss orders, which automatically close your position if the market moves against you by a specified amount.
Spread bets and CFDs on spot prices are leveraged products, meaning you only need to deposit a fraction of the full trade value as margin. While this can amplify profits, it also means losses can exceed your initial deposit. We also offer share dealing and ISA accounts for investors who want direct ownership of shares, where the execution price is also referenced to the spot price.
For fund-based exposure to multiple markets, UK ETFs and global ETFs offer diversified spot market exposure in a single trade. Our guide to index funds vs ETFs explains the key structural differences between these.
