Key differences

CFDs Knock-outs

Trade contracts on the difference between the opening and closing market price of a trade.

  • Manage risk yourself
  • Value moves with the market
  • Control a large trade for comparatively small outlay with leverage, for outsized risk or reward

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Trade options with a pre-defined risk profile and control over how much your trade costs.

  • Limited risk
  • Value moves with the market
  • Adjust your trade size and knock-out level to control your trade cost and exposure

Learn more

CFDs vs knock-outs: overview

Whether you prefer margin trading or fixed risk upfront, you can choose the product that suits your strategy.
  CFDs Knock-outs
What is it? A contract between you and us, to exchange the difference in price of a market between the open and close of a trade. An option – a type of derivative contract enabling you to trade on the price of an underlying market.
What markets can I trade?
  • Commodities
  • Indices
  • Crypto
  • Shares
  • Forex
  • ETFs
  • Bonds
  • Futures
  • Commodities
  • Indices
  • Crypto
  • Shares
  • Forex
  • ETFs
  • Bonds
Do I have to own any assets? No, you can just speculate on prices. No.
Can I trade falling markets? Yes. Yes.
Is it limited-risk? Not automatically, but you can manage risk yourself with in-platform tools. Yes, risk management is built into every trade.
Can I use leverage? Yes, to the limit set by your regulator. No, but you do have control over your exposure.

CFDs vs knock-outs: in depth

Get a deeper look at features, costs and mechanics – then choose the approach that best fits you.
  CFD Knock-out
How does market movement affect its value? A CFD’s value moves with the underlying market. Higher leverage means you can control a larger trade with less capital – so even small market moves can have a bigger impact on your profit or loss. A knock-out’s value moves with the underlying market. How much your trade’s value is affected depends on how many options you buy, and where you place your knock-out level.
Can I trade on falling markets (go short)? Yes. You can buy to open if you think a market will rise, and sell to open if you think a market will fall. Yes. You can buy a 'Call’ option if you think a market will rise, or buy a ‘Put’ option if you think a market will fall.
Are trades limited-risk?

No. Your maximum risk is technically the entire balance of your account.

However, you can protect against risk by adding guaranteed stops, stop-losses (not guaranteed against slippage) and take-profit orders.

You’ll be charged if your guaranteed stop is hit.

Yes. Risk management is built into knock-outs.

You’ll choose a knock-out level for each trade before you open. It works a bit like a guaranteed stop, and also enables you to control how far your money goes.

Move the knock-out level closer to the market price, and your trade will be cheaper to open – with the same upside potential as a more expensive trade. However, you’re more likely to be knocked out.

If the market hits the knock-out level, your trade will be knocked out – but your maximum risk is only ever the amount you paid to open (plus any negative funding adjustments if you hold your trade overnight).

Can I use leverage?

Yes. When you open a trade, you’ll only put up a fraction of its full value – margin – to open, giving you access to leverage.

Remember that trading with leverage can result in large, fast losses as well as gains.

No, but you do have control over how far your money goes.

Move the knock-out level closer to the opening market price, and you’ll pay less to open your trade.

This will give you the same upside exposure as a more expensive trade, for a lower initial payment.

Will I have to pay any fees?

Yes. You’ll always pay the spread, our charge for executing your trade.

Depending on your trade, you may pay other fees, like guaranteed stop premiums or overnight funding admin fees.

Find out more about our fees.

Yes. You’ll always pay the spread, our charge for executing your trade.

You’ll also pay the knock-out fee – our charge for protecting the trade against slippage – when you open. But you’ll get this back if you close your trade before it gets knocked out.

Depending on your trade, you may pay other fees, like overnight funding admin fees.Find out more about our fees.

 

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