How to trade or invest in the NASDAQ

When trading contracts for difference (CFDs), you’re entering into a contract to speculate on either our US Tech 100 prices or the share prices of companies listed on the exchange. The amount the price of what you’re trading rises or falls (so, the difference between the price when you open versus when you close your position) determines your profit or loss.

Trading CFDs on the US Tech 100: cash indices

One way to trade the US Tech 100 using CFDs is on the spot (cash) price.

Trading the spot price means you get the closer pricing to the real time NASDAQ 100 than you would with futures, as prices are based off our future’s price with a fair value adjustment to get as close to the real time cash price as possible, plus low spreads and no commission on indices.

As spot trading does come with overnight funding fees if you leave a position open overnight, this form of trading is best suited to short- and medium-term strategies.

To open a US Tech 100 spot position:

1. Select the US Tech 100 under ‘Indices’
2. Choose the ‘Cash’ option
3. Decide whether you want to buy (go long) or sell (go short)
4. Choose your deal size in terms of number of contracts
5. Set yours stops and limits
6. Click ‘place deal’ to open your position

Trading CFDs on NASDAQ 100: options

With options you have the right, but not the obligation, to exercise the contract on or before its expiry date. When you trade options via CFDs, you’ll pay an initial deposit (called premium) to open a larger position. You’ll then speculate on the option’s premium for a profit or loss – but note that when selling an option, losses can significantly outweigh your deposit amount.

Remember, buying options is limited risk as you’ll only risk as much as your margin paid, but selling options is technically unlimited risk, as there’s no restriction to how much a market’s price can rise.

To open a CFD options position on the NASDAQ 100:

1. Go to the CFD trading platform
2. Click on ‘Options’ instead of ‘Indices’
3. Choose ‘Indices’ as your asset class and select the US Tech 100
4. Decide on your preferred maturity date range – daily, weekly or monthly
5. Select a call or put option, and whether you want to buy (go long) or sell (go short)
6. Choose the size of your position
7. Set yours stops and limits
8. Click ‘place deal’ to open the position

Trading CFDs on our US Tech 100: index futures

When you trade futures with us, you won’t pay additional overnight funding charges or commission, as the cost is built into the spread. This is why futures have wider spreads than spot positions.

Trading index futures via CFDs means you’re agreeing to trade our US Tech 100 at a specific price on a specific date in the future. To open a futures position:

1. Go to the CFD trading platform
2. Select the US Tech 100 under ‘Indices’
3. Choose ‘Futures’ instead of ‘Cash’ to trade and select your preferred date range
4. Decide whether you want to buy (go long) or sell (go short)
5. Choose your deal size in terms of number of contracts
6. Set yours stops and limits
7. Click ‘place deal’ to open your position

Trading CFDs on NASDAQ 100: ETFs

If you want to gain exposure to a broad range of NASDAQ 100 shares all in one place, you can trade ETFs. Exchange traded funds (ETFs) are investment instruments that track the performance of a range of NASDAQ stocks, to give you variety with very low commissions.

ETF commissions start from just 2 cents per share on each side of every CFD trade, with a minimum fee of $15 for online orders. Just bear in mind that you’ll be trading on the cash (spot) price with ETFs, so there are funding charges you could incur if you leave your position open overnight.

To open a NASDAQ 100 ETF position:

1. Go to the CFD trading platform
2. Select ‘ETFs’ instead of ‘Indices’
3. Click on your chosen ETF, for example the iShares NASDAQ 100 UCITS
4. Decide whether you want to buy (go long) or sell (go short)
5. Choose your deal size in terms of number of contracts
6. Set yours stops and limits
7. Click ‘place deal’ to open your position

Trading CFDs on NASDAQ 100: shares

For those who don’t want broad exposure, but rather have their eye on a particular NASDAQ-listed company, try CFD share trading.

With CFD share trading, you won’t own company shares outright. Unlike owning company shares, which means you can only make a profit if the share price goes up, you can go long or short.

While owning shares means paying the full share price upfront, CFD trading is leveraged. This means you’ll pay only a small deposit amount (called margin) to open a larger position.

However, as profits and losses will be calculated based on your total position size, these can substantially outweigh your margin amount, so ensure you always trade within your means.

CFD share trading on US shares has a minimum online charge of $15.²

To open a shares position, simply go to the CFD trading platform and:

1. Select ‘Shares’ instead of ‘Indices’ or ‘ETFs’
2. Click on your chosen company, for example Tesla
3. Choose whether you want to trade shares on the spot or using futures
4. Decide whether you want to buy (go long) or sell (go short)
5. Choose your deal size in terms of number of contracts
6. Set yours stops and limits
7. Click ‘place deal’ to open your position

Want to own funds tracking the NASDAQ 100, or actual shares of a company listed on the NASDAQ? Then you may want to invest in the NASDAQ 100 with our share trading platform.

Share trading is the outright purchasing of ETFs or company shares, in this case of a company listed on the NASDAQ 100, with the intention of making a profit or earning income from dividends.

When you invest in shares this way, you’ll pay the full value of the share price upfront, with no leverage. This means you’re not at risk of your losses or profits outweighing the amount you put in. Instead, you’ll make a profit if the share price rises, or none if it falls.

Buying NASDAQ ETFs with share trading

If as an investor you want to gain exposure to the whole NASDAQ 100 index, rather than just one stock, try buying NASDAQ ETFs.

Because this is a form of investing, NASDAQ ETFs are best suited to long-term or medium-term positions or a ‘buy and hold’ strategy.

Just like with ETFs, investing in US shares means you can pay zero commission per trade.¹

Buying NASDAQ shares with share trading

If you’re interested in specific NASDAQ 100 company stocks rather than a broad-range ETF, you can buy shares on our share trading platform.

This means you won’t get exposure to the entire NASDAQ 100 index, but does mean that you can choose the stocks most closely aligned to your individual trading strategy.