Juventus vs Milan

  This means that you don't actually own the underlying financial asset, you are simply predicting whether prices will go up or down. Let's take investing in stocks for example. You want to buy 10,000 Barclays shares and the value of the share is 280p which means your total investment will cost you £28,000 and that's not counting commissions or fees your broker might charge for your purchase. In return, you will get a share certificate and legal documents that prove your ownership of those shares. In other words, you have something tangible in your hands until you sell it, preferably for profit.

With CFD trading you only need small percentages of the total trading value to place deals and maintain the same level of exposure. If XTB provides you with a 5:1 (20%) leverage on Barclays shares, you will only need a deposit of £5,600 to trade the same amount.

If Barclays shares rose by 10% to 308p, the deal value is now £30,800. So after an initial deposit of £5600 I made a profit of £2800 due to trading this CFD. This represents a 50% return on your investment compared to only 10% if you decide to actually buy the stock.

It is important to remember that while leverage can maximize your profits, it multiplies your losses in the same way. If prices move against you you can close your positions by calling the margin or to top up your balance to keep the position open, so it is important to know how to manage your risk.

The match ended in a draw  1-1

If Barclays' stock drops 10% to 252p per share, the value of the deal is now £25,200. After an initial deposit of just £5,600, trading this CFD has resulted in a loss of £2,800, which is a 50% loss on your investment compared to a 10% loss if the shares were actually bought.