Although both instruments are often mentioned in the same breath, CFDs and stocks differ fundamentally. While stocks represent real ownership in a company, CFDs are pure leveraged products without delivery claim and have a speculative character.
Important: CFDs are highly speculative financial instruments and can lead to rapid losses due to leverage. Between 74–89 % of retail investor accounts lose money when trading CFDs (depending on the broker). Trading CFDs carries a high risk of loss and is not suitable for every investor. Here is a structured comparison of the most important aspects.
1. Ownership & Dividends
| Criterion | Stocks | CFDs |
|---|---|---|
| Ownership | Yes – you become a shareholder | No – pure bet on price development |
| Dividends | Yes – full dividend (possibly tax-advantaged) | Dividend adjustment (usually credited, debited for short positions) |
| Voting rights | Yes (with corresponding share) | No |
Conclusion here: Anyone who wants to own shares in companies long-term and receive dividends cannot avoid stocks. CFDs are not intended for this and are also not suitable due to long-term costs (overnight swaps).
2. Leverage & Margin Requirement
| Criterion | Stocks | CFDs |
|---|---|---|
| Leverage | No leverage (except depot credit) | Up to 1:30 (retail), sometimes higher (professional) |
| Margin requirement | 100 % (cash purchase) | 3–20 % (depending on leverage & asset) |
| Loss risk | Maximum the investment | Theoretically unlimited (short positions) – Negative balance protection prevents debt, but not total loss |
Conclusion here: CFDs allow large positions with little capital – this increases profit opportunities, but also dramatically increases loss risk. Trading CFDs can lead to the complete loss of invested capital. Stocks are clearly safer here, but also less profitable with small amounts.
3. Fees & Costs
| Criterion | Stocks | CFDs |
|---|---|---|
| Order fees | 0–10 € per order (depending on broker) | Often 0 € (market makers), but spread + commission possible |
| Holding costs | None (except depot fee) | Overnight financing (swap) – can become expensive with long-held positions |
| Spread | Usually very tight (exchange) | Broker-dependent – very tight for forex, more expensive for stock CFDs |
Conclusion here: For short-term trading CFDs can be cheaper (no order fees, but swaps must be considered), for long-term holding stocks are almost always cheaper (no daily calculated swaps).
4. Trading Hours & Availability
| Criterion | Stocks | CFDs |
|---|---|---|
| Trading hours | Exchange opening hours (e.g. 9–17:30) | Often 24/5 (forex, indices), stock CFDs usually exchange-compliant |
| Short selling | Yes, but more complex (short selling) | Very easy and immediately available |
| Margin call | No (cash purchase) | Yes – can lead to forced closure |
Conclusion here: CFDs offer more flexibility (short positions, 24/5 for some assets), stocks are simpler and less risky for classic long investment.
5. Risk & Deposit Protection
| Criterion | Stocks | CFDs |
|---|---|---|
| Maximum loss | 100 % of investment | Theoretically unlimited (short), but usually negative balance protection for retail investors |
| Deposit protection | Up to €100,000 (EU banks) | Up to €20,000 (EU brokers) + negative balance protection |
Conclusion here: CFDs carry a significantly higher loss risk due to leverage – negative balance protection prevents debt, but not total loss, and usually protects only retail investors. Stocks are clearly less risky here.
Conclusion
CFDs and stocks serve different needs: Stocks are suitable for long-term, uncomplicated investing with ownership and dividends. CFDs are intended for short-term, leveraged trading, but come with significantly higher risk due to their speculative nature and leverage. Which instrument fits better depends on time horizon, risk tolerance and strategy. Trading CFDs carries a high risk of loss and is not suitable for every investor. Between 74–89 % of retail investor accounts lose money when trading CFDs. Anyone interested in CFDs or stocks and wanting to follow prices live will find a neutral overview here of established platforms that cover almost the entire range of assets: To the Trading Platform Overview.