Trading CFDs carries considerable risk of capital loss. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
February 16, 2016
A CFD is a 'contract for difference' between you and your broker. You choose the shares, indices, currency pairs or raw materials you want to buy or shorten and your broker finances your transaction. So, the broker is your counter-party.
The CFD is a contract with which you receive the difference between the purchase rate and the selling rate.
If the position does well, you make a profit. If it doesn't go well, you take the loss. The broker only finances the position, the risk is all on you.
Not only the position in itself creates an exposures to risks in the form of differences in rates, but the contract in itself is also a risk: you make an agreement with your broker, and it should preferably be a very reliable broker!
Plus500 exists since 2008, and they are listed on the Main Market of the London Stock Exchange.
In 2014, Plus500 had a net profit of 102.5 million Euros and the capital amounts to over 100 million Euros. Among others, Plus500 is regulated by the Financial Conduct Authority (FCA) in England.
April 21, 2020
CFDs are digital derivatives whose value depends on different assets. They have several important advantages over ordinary stocks. Here are the basics.
October 11, 2016
Several theories have emerged about why the British pound tumbled from about $1.26 against the US dollar to about $1.18 in just two minutes on Friday morning, but we may never know the precise reason despite the Bank of England looking into the cause.
March 10, 2016
You regularly read about the dangers of CFDs. The leverage effect can cause you to lose a lot of money. But you can keep the risk fully under control; therefore CFDs do not have to be dangerous at all.
February 26, 2016
You must always protect a new CFD position with a stop. This way you know the maximum amount of your loss beforehand. But only with a guaranteed stop can you be really sure of the exit rate.