---
title: "Trading long/short: equities vs equity CFDs"
url: https://arb-maker.com/archives/4626/
description: "Trading long/short: equities vs equity CFDs Posted by Admin on Jan 14, 2017 in ArbMaker News! | No Comments What are the differences between trading…"
published: 2026-08-10
updated: 2026-08-10
---

# Trading long/short: equities vs equity CFDs

Published 2026-08-10

Posted by Admin on Jan 14, 2017 in ArbMaker News!

What are the differences between trading long/short using equities as opposed to using what are called CFDs?

CFD is the abbreviation for ‘contract for difference’. It’s an instrument invented in the UK and behaves somewhat like a swap. Our trading account focuses on equity CFDs from Interactive Brokers (IB). The IB site has useful explanatory notes on CFDs here and a short video from them is below.

The key points of interest for our strategic approach are:

- CFDs offer around twice the leverage of equity margin on a long/short trade
- Suitable mainly for shorter trade horizons due to financing costs
- No expiry date like options
- CFD leverage works well with a hedged strategy
- IB’s CFDs **exactly** mirror the underlying equity spread (which is far from the case with other CFD brokers)
- IB has very low commissions for a frequent trading approach like ours.
- Unavailable in some jurisdictions including the USA. Dodd-Frank Act legislation considers and regulates them as swaps.

Our [experience and data](https://arb-maker.com/archives/4583) show that equity-only trading under our approach beats benchmarks and broad market gauges. CFDs simply magnify that performance further.

[All 150 archived ArbMaker News! posts](https://arb-maker.com/archives/category/arbmaker-news/)