Can you take a long position for CFDs at XM as of December 2024?
Yes, you can take a long position for CFDs at XM.
- You should take a long position if you think the price of the underlying instrument of the CFD will go up.
- Keep in mind that you will have to pay a financing rate on your leveraged trade on top of other charges.
- Be aware that leverage not only amplifies your potential profits, but can also multiply your losses.
- You will be eligible for dividends if you take a long position.
We, at BrokerChooser, want to help you make sense of the brokerage world. Be sure that we only recommend brokers that are regulated by at least one trusted authority, which is the case with XM.
Visit broker
71.61% of retail CFD accounts lose money
What is a long position?
Trading with CFD (Contract for Difference) allows traders to speculate on an instrument's price changes. If you think an asset's price will go up over time, you'll buy, meaning you will go long. And if you think the price will fall, you'll sell, in other words, you go short.
Taking a long position is more straight-forward and better if you are a beginner than shorting, which is more for pros. If you want to take a long position, you should deep dive into indicators like macroeconomic trends and historical price patterns.
Let's see what type of educational material and other tools are available at XM:
|
📚 Quality educational texts
|
No | Yes | Yes |
|---|---|---|---|
|
🎥 General educational videos
|
Yes | Yes | Yes |
|
🎮 Demo account
|
Yes | Yes | Yes |
Data updated on December 10, 2024
Be careful because CFDs allow traders to access markets with leverage, meaning they can trade larger positions than their initial capital. While leverage amplifies potential profits, it also magnifies potential losses. At some brokers, you can set your leverage manually, which gives you a better control over your risk.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.61% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. .
What fees will I have to pay?
CFD fees are generally made up of the spread, commissions and financing rates charged by the broker. If you plan on holding a position for longer, you might consider trading the underlying asset itself rather than the CFD, as you will definitely have to pay the financing rate which will bite into your potential profits.
The financing rate (also called an overnight rate) is particularly important in CFD trading, it is a time-sensitive cost that adds up as you hold your positions longer. Brokers usually apply different financing rates depending on the underlying asset of the specific CFD.
Also keep in mind that if you have a long position, you are eligible to receive dividend payments. In contrast, if you hold a short position, dividends will be deducted from your brokerage account.
Here is a breakdown of some benchmark fees at XM for different CFD products, compared to the broker's closest competitors. The benchmark fees include all fees (spread, commission, financing rate), calculated for a $2,000 position, with 20:1 leverage: open, hold for 1 week, and close.
|
S&P 500 index CFD fee
|
$3.0 | $2.6 | $3.3 |
|---|---|---|---|
|
Euro Stoxx 50 index CFD fee
|
$3.0 | $3.1 | $2.4 |
|
Apple CFD fee
|
$6.9 | $4.3 | $3.4 |
|
Vodafone CFD fee
|
$17.5 | $6.5 | $7.0 |
|
EURUSD spread
|
0.1 | 1.4 | 0.1 |
|
GBPUSD spread
|
0.8 | 1.6 | 0.5 |
|
S&P 500 CFD commission
|
No commission is charged | No commission is charged | No commission is charged |
|
Euro Stoxx 50 CFD commission
|
No commission is charged | No commission is charged | No commission is charged |
|
CFD score
|
4.3 stars | 4.6 stars | 4.7 stars |
Data updated on December 10, 2024
What is long position with an example?
Let's assume you have $1000, and you set the leverage at 1:20, and you want to take a long position on CFDs Apple shares. Let’s say the price goes up by 2%.
- Calculate the position size: With 1:20 leverage, you can control a position size that is 20 times the value of your investment. So, $1000 multiplied by 20 equals a total position size of $20,000.
- Let's assume a price increase by 2%.
- With the increase the new size if your position will be $20,400 ($20,000 x 0,02), so the profit will be $20,400 - $20,000 = $400.
- You will have to pay the spreads and fees so the final profit will be lower.
- The spread is the difference between the buy and sell price of the CFD. If, for example, the spread on Apple CFDs is 0.05% of the trade value, so in this case, the spread would be 0.05% x $20,000 = $10.
- If you take a long position, you will have to pay an overnight financing charge on the leverage amount, which typically ranges from 0.1% to 0.5% per day. Let's say the overnight financing charge on Apple CFDs is 0.1% per day. If you hold the position for one week, the financing charge would be 0.1% x 7 days x $19,000 = $133.
Check the table above how much those charges will be with XM.
Be careful as leverage can enhance both potential profits and losses, so it's essential to carefully manage your risk and be aware of the potential for amplified gains or losses when using leverage in CFD trading.
Looking for a CFD broker?
If you are looking for the brokers that offer the best CFD trading conditions, check our top recommendations of the best CFD brokers in the world.
Our expert team here at BrokerChooser specializes in helping you find a broker that best suits your needs. We have reviewed over 100 brokers based on BrokerChooser's unique methodology.
If you have any feedback or questions, feel free to contact us via email!
Check out this short video for a behind-the-scenes peek into how our experts personally test and evaluate brokers.
Further reading
- How to buy natural gas at XTB?
- XM CFD trading conditions explained
- XM S&P 500 CFD spreads explained
- S&P 500 CFD fees at XM explained
- Euro Stoxx 50 CFD fees at XM explained
- CFD fees at XM explained
- Apple CFD fees at XM explained
- CFD financing rates at XM
- CFD risk warning at XM explained
- Stop loss orders & risk management at XM for CFDs
- Maximum leverage for CFDs at XM explained
- Apple stock CFDs for $1,000 at XM
- Short position for CFDs at XM explained
- Apple CFD leverage at XM explained
- Can you short at XM?
- Is CFD trading tax-free at XM?
- XM stock CFD trading conditions explained
- Negative balance protection for CFDs at XM
- XM crypto CFD trading conditions explained
- XM commodity CFD trading conditions explained
Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.
