Contracts for Difference (CFDs) provide traders with a powerful way to speculate on the price movements of popular cryptocurrencies without owning the underlying assets. This guide details the essential specifications for trading crypto CFDs, including contract sizes, trading hours, and key risk management parameters like margin and leverage.
Understanding these specifications is crucial for effective risk management and strategic planning in the volatile cryptocurrency markets.
Understanding CFD Contract Specifications
A CFD is a derivative product that allows you to profit from both rising and falling prices. The profit or loss is determined by the difference between the entry and exit prices of the underlying asset.
The following table outlines the key specifications for a selection of major cryptocurrency CFDs. All values are quoted against the US Dollar (USD).
| Currency Pair | Contract Size | Minimum Lot Size | Increment Step | Maximum Lot Size | Quote Currency | Margin Requirement |
|---|---|---|---|---|---|---|
| ADAUSD (Cardano / USD) | 1000 | 0.01 | 0.01 | 10 | USD | 20% |
| BCHUSD (Bitcoin Cash / USD) | 10 | 0.01 | 0.01 | 10 | USD | 20% |
| BTCUSD (Bitcoin / USD) | 1 | 0.01 | 0.01 | 10 | USD | 20% |
| DOGEUSD (Dogecoin / USD) | 10000 | 0.01 | 0.01 | 10 | USD | 20% |
| DOTUSD (Polkadot / USD) | 100 | 0.01 | 0.01 | 10 | USD | 20% |
| ETHUSD (Ethereum / USD) | 1 | 0.01 | 0.01 | 10 | USD | 20% |
| LNKUSD (Chainlink / USD) | 100 | 0.01 | 0.01 | 10 | USD | 20% |
| LTCUSD (Litecoin / USD) | 100 | 0.01 | 0.01 | 10 | USD | 20% |
| XRPUSD (Ripple / USD) | 10000 | 0.01 | 0.01 | 10 | USD | 20% |
| XLMUSD (Stellar / USD) | 10000 | 0.01 | 0.01 | 10 | USD | 20% |
Key Terms Explained:
- Contract Size: The quantity of the cryptocurrency that one standard lot represents.
- Lot Size: The minimum and maximum amounts you can trade.
- Margin Requirement: The percentage of the total trade value required as a deposit to open the position (e.g., 20% margin equates to 1:5 leverage).
Trading Hours and Server Time
Cryptocurrency markets are known for operating 24/7, but CFD trading on these assets through many brokers follows a structured schedule with a brief daily closing period for settlement.
All trading hours are based on GMT+2 server time.
| Currency Pair | Trading Session Open (Server Time) | Trading Session Close (Server Time) |
|---|---|---|
| ADAUSD (Cardano / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| BCHUSD (Bitcoin Cash / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| BTCUSD (Bitcoin / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| DOGEUSD (Dogecoin / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| DOTUSD (Polkadot / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| ETHUSD (Ethereum / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| LNKUSD (Chainlink / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| LTCUSD (Litecoin / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| XRPUSD (Ripple / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
| XLMUSD (Stellar / USD) | Monday - Friday: 00:00 | Monday - Thursday: 24:00 Friday: 23:55 |
It is critical to be aware of these hours to manage open positions around the market close, especially before the weekend.
Leverage, Commissions, and Risk Parameters
Leverage allows you to control a large position with a relatively small amount of capital, amplifying both potential profits and losses. A uniform set of risk management rules applies across these cryptocurrency pairs.
| Currency Pair | Leverage | Commission | Margin Call | Stop Out |
|---|---|---|---|---|
| ADAUSD (Cardano / USD) | 1:5 | 0.4% | 50% | 30% |
| BCHUSD (Bitcoin Cash / USD) | 1:5 | 0.4% | 50% | 30% |
| BTCUSD (Bitcoin / USD) | 1:5 | 0.4% | 50% | 30% |
| DOGEUSD (Dogecoin / USD) | 1:5 | 0.4% | 50% | 30% |
| DOTUSD (Polkadot / USD) | 1:5 | 0.4% | 50% | 30% |
| ETHUSD (Ethereum / USD) | 1:5 | 0.4% | 50% | 30% |
| LNKUSD (Chainlink / USD) | 1:5 | 0.4% | 50% | 30% |
| LTCUSD (Litecoin / USD) | 1:5 | 0.4% | 50% | 30% |
| XRPUSD (Ripple / USD) | 1:5 | 0.4% | 50% | 30% |
| XLMUSD (Stellar / USD) | 1:5 | 0.4% | 50% | 30% |
Understanding Risk Levels:
- Commission: A small fee charged on the total trade value, typically applied when opening and closing a position.
- Margin Call: A warning level (e.g., 50%) that alerts you that your account equity has fallen to a point where you may need to add more funds.
- Stop Out: The critical level (e.g., 30%) at which your positions will be automatically closed to prevent further losses if your equity continues to decline.
👉 Explore more strategies for managing risk with leveraged products.
Overnight Financing (Swap Rates)
Holding a CFD position open overnight incurs a financing charge or credit, known as a swap. This fee compensates for the cost of leverage.
The swap is calculated using the following formula:
Swap = Daily Closing Price × Contract Size × (Lot Size × Swap Rate / 100 / 360)
A triple swap charge is typically applied on Wednesdays for most instruments to account for the weekend, but in this case, the specification indicates a 3-day swap is applied on Fridays.
Frequently Asked Questions
What is the minimum amount needed to start trading crypto CFDs?
The minimum required depends on the contract size and minimum lot size of your chosen cryptocurrency. For instance, with BTCUSD, the minimum lot size is 0.01, which represents 0.01 Bitcoin. You would need enough margin to cover this position size.
Why is there a trading session close for crypto CFDs if the underlying market is 24/7?
The brief daily closing allows the broker to settle trades, calculate financing fees (swaps), and perform necessary system maintenance. This is a standard practice for CFD brokers, even for assets that trade continuously.
How does the 1:5 leverage work in practice?
A 1:5 leverage ratio means you only need to deposit 20% of the total value of the trade. For example, to open a $1,000 position, your required margin would be $200. This amplifies your gains and losses by a factor of five.
What happens if my account hits the stop-out level?
If your account equity falls to the stop-out level (e.g., 30% of the required margin), the broker will automatically begin closing your positions, starting with the least profitable one, until your equity level rises above this threshold.
Is the swap rate always a cost, or can I earn from it?
The swap can be either positive or negative, depending on your position direction (long or short) and the prevailing interest rates. However, for cryptocurrency CFDs, swaps are typically a cost for holding long positions overnight.
Are these specifications standard across all brokers?
No, contract specifications like leverage, margin requirements, and trading hours can vary significantly between different brokerage firms. It is essential to always check the specific details provided by your chosen platform before trading.