So you have three types of accounts:
Starting with Invest and ISA.
These two are the same in that you can only play with the money you deposit. You can only go long, as in the aim is buy low and when the sell price is higher than your avg you sell to make a profit.
There’s fewer stocks in the ISA version because they need to be ISA eligible. The benefit of the ISA is you can put in up to £20k in a tax year and if you have significant gains you won’t need to worry about CGT.
Basically everyone should be using ISA, and the only time to use Invest is you’ve got more than £20k to deposit, or you really want that stock like NIO that can’t be held in ISA.
So onto CFD or contract for difference.
This is aimed at day trading and swing trading (days and weeks) rather than longer term investments.
You can go in either direction so long if you think the price is going up, or short if you think the price is going down.
When you go short instead of buying you hit sell. So say the share price is 100, and you wait until it drops to 80 and close your position (buying at a cheaper price). You make profit on that 20.
Obviously the key concern is with a short position you have infinite loss (if the position was never closed) and the price kept going up. With a long position the lowest is potentially zero.
You have leverage to play with so think of it as a quick loan. If you hold over to the next day you’ll pay a small fee.
You have margin level that you need to keep above a threshold, otherwise you fold. It’s up to you to close and take the hit or deposit more cash if things go against you.
As a retail customer you are protected against negative loss.
It’s a quick way to lose a lot of cash quickly if you don’t understand and jump in.
With CFD you also get access to Forex pairs (say you want to bet on the strength of currency (GBP vs USD). You also have commodities like sugar, coffee, gold etc
And for a limited time UK has access to buying instruments that track crypto until the FCA stops that in about 40days.