Understanding CFD spread

Hi all,

I have a query regarding spread that somebody may be able to help with me.

So I bought a ‘Sell’ CFD on Luckin Coffee today. The spread on this in the screen shot is 14.6¢
Does this mean profit does not occur until the instrument drops 14.6¢ below by sell (ask) price. Are there any other elements at play here? Internal fees from Trading212? IV? Etc.

Also is the spread locked in at the spread price upon purchase of the bid or ask, or is it changeable as the real time spread changes.

Hi, hope you are doing well.

Yes, as soon as you sold LK you were down 14.6cents because of the spread differential and so you’re correct, the price of the stock would need to fall by 14.7cents or more before your position would become profitable.

When you trade CFDs with this platform you do so on margin and this is compulsory, this means that keeping the position open overnight will incur an interest charge which they call a Swap. There is no commission however.

On that particular stock the spread is changeable and will be manipulated by the platform depending on the market conditions.

I notice from your screenshot you are using the mobile app and I don’t use it too often myself so I cannot tell you where to find all of this info there but on the desktop platform it can all be found on the right hand side of the chart screen under ‘Instrument Details’ (click on the ‘i’ icon and then scroll down)

I hope this helps but if something isn’t clear let me know

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That all makes sense and as I suspected, thanks.

Just scroll to bottom of the page on mobile app for instrument details

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Thanks for that. I was looking for more detail on additional fees incurred by T212, where one can find information on whether or not the spread is changeable or locked etc.

I’m trying to find out the spread differences myself at this very time as I’m shorting luckin coffee and although price has dropped well below my sell price the buy price is going up. The spread isn’t working. Sell price goes up buy price comes down. In my eyes it’s doing the opposite of what it’s supposed to be doing?

The 30 I took afterwards and the price was completely different at time of purchase and stayed the same for at least 18 secs after the purchase was made but still I paid higher

So your spread is 27 cents. Meaning that the 30 you bought at 4.70 need to drop 27cents down before you will see a profit. If the spread increases, you will need to drop even further to clear the spread distance. After hours there is low volatility so the spread widens. Proceed with caution. Take profit when it comes. It could skyrocket at open tomorrow and you could lose a lot of cash.

Yeah I get the spread difference and what it needs to do to make a profit. Look at it now, the spread is getting bigger. Can we check why? I know it’s to do with liquidity but how do we check this?

It’s killing my buzz lol

My understanding was it had to do with trade volume but I am happy to be corrected. Nightmare spread on that first screenshot though.

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