Authorised and regulated by the Financial Services Authority
Below are frequently asked questions relating to CFD Trading Risks. For other FAQ categories, please click on the appropriate FAQ category found in the left menu, or on the links directly below.
There is no way of knowing for sure the direction of the prices of CFDs in advance. Therefore, like many investments, CFDs carry a risk that market prices may go in the opposite direction of the view held. They also offer you a high degree of leverage; using a small deposit (margin) you can control a much larger position. This can dramatically magnify your profits but also your losses and if not mitigated correctly you can lose more than your initial investment. Your exposure to losses can be mitigated by the use of stop losses and we recommend you use these on each trade. You should set some limits on the length of time you are willing to invest and the amount of loss you are willing to incur. CFD trading is inherently risky and is not appropriate for all investors. 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.
topYou will receive all the benefits of any corporate action on the underlying share. These transactional benefits may be substituted by an equivalent cash sum, which will be credited or debited to your account on the next business day.
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