Leverage & Risk
CFD trading is inherently more risky, and potentially more rewarding than ordinary share dealing.
If you are depositing an initial margin of 5% of the value of the transaction your gains and losses will be magnified by twenty times. This can make for spectacular profits, but also substantial losses. Unlike an ordinary share deal you can lose more than you invest. However, you do have the ability to protect yourself using stop losses and we recommend you set these on every trade.
If you lose more than your initial margin payment in a single day you will be liable to pay the difference. If the loss is more gradual you will be required to keep the margin topped up to the minimum required percentage or close some of your positions to reduce this margin requirement. If you fail to make prompt margin payments, part or all of your position may be closed and losses could exceed your initial margin. Profits on open positions are credited onto your margin account daily and you can instruct immediate fund transfers in and out of your CFD account as you wish.
Successful trading involves adapting your strategy to market conditions and effective risk management is critical to professional trading success. Succesful CFD trading is not only about big gains but also about limited losses.
Please be aware that securities and derivatives markets may be subject to rapid and unexpected price movements and past performance is not necessarily a guide to future performance. Trading in these markets is generally considered to be suitable only for the more experienced investor as it carries a high degree of risk.
You should know how much you potentially can lose and honestly evaluate if you can afford to lose it in view of your financial resources and investment goals.
Changes in exchange rates may also cause your investment to go up or down in value and tax laws may be subject to change. If in any doubt, please seek further advice.
