What ownership means
A stock is a security representing a share of ownership in a company. Rights depend on the type of share and may include voting or dividend distributions, among other rights. A contract for difference is not that stock: it is a contract on a change in the price of the underlying asset. Seeing the company’s name or chart in an app is therefore not enough. Check the instrument type in the product document and trade confirmation, not just in the search result.
Distinguish exposure from the amount deposited
In a leveraged product, exposure may exceed the margin you provide. In a purely mathematical example, exposure of 1,000 dollars backed by 100 dollars of margin changes by 50 dollars when the asset’s price changes by 5%, before costs and assuming linear exposure. This is a change equal to half the margin. A position’s loss may exceed the margin allocated to it; an account-level loss limit depends on the entity, client classification and applicable rules. For example, FCA rules protect the account balance of retail CFD clients in the UK. This example is not a quoted rate or a recommendation to use leverage.
The holding period changes the comparison
IG International’s CFD fee schedule lists overnight financing for cash contracts, distinguishing them from futures-based contracts. In a stock account, check currency conversion, custody and interest if using credit; Saxo’s international fee schedule gives examples of such charges. These are terms for specific providers and products, not a price for an account in Israel. Compare a defined holding scenario instead of inferring the cost of holding for a month from the opening commission alone.
Do not transfer protections from one product to another
An entity’s licence does not eliminate market risk and does not, by itself, establish which protections will apply to your account. Check the party to the agreement, client classification and terms for handling assets and balances. Even an unleveraged stock investment may lose value. When the protection document is unavailable or does not apply to the selected entity, flag the missing information and avoid promises such as “the money is fully protected”.
This information is for learning and comparison, not investment advice. Verify product details and eligibility conditions against the current source.
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