CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. -- % 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.

Difference Between Forex CFD's and Spot FX?

Hi guys,

What is the difference between Forex CFD’s and the actual Spot FX market? If I’m correct, CFD’s are a derivative that track the price of the underlying asset (in this case currencies) and we trade contracts and bet on the direction of the exchange rate.

If this is true, then how does this affect liquidity? Because if we’re trading CFD’s, doesn’t this mean we’re trading a completely different product to true Spot FX? We’re trading a contract and not actual currency, therefore doesn’t the Forex CFD market have far less liquidity than the real Spot FX market?

And my last question, do large players trade CFD’s or do they trade the true underlying asset? When we hear that Ray Dalio or George Soros has taken a speculative position in a currency, are they expressing this idea in the Spot FX market, or are they using derivatives such as CFD’s?

Apologies for any ignorance or lack of understanding.


Great questions @MCMTheDawg :slightly_smiling_face:

The following videos should shed light on your queries:

Please do let us know if you feel something isn’t covered well enough in the videos to answer your questions :+1:

Many thanks for bringing them forward! :pray: Literally makes our day when people ask these things :heart:


Appreciate the kind words and awesome reply! Gonna work my way through those videos now :slight_smile:

Am I right in thinking you don’t suffer slippage if you use limit orders? If you use a limit order then you’ll either receive a partial fill or no fill at all, as opposed to being slipped? And if this is true, is this the same for our DARWIN investors, or are their orders always processed as market orders and therefore open to slippage?


Execution of limit orders is always as market orders when the limit was triggered, often triggered by another and better offer of the liquidity provider.