★ My

Encyclopedia › Markets ›

CFDs (contracts for difference)

In one line: A leveraged bet on a price change, without owning the underlying asset.

With a CFD you and the provider swap the price difference between opening and closing. You never own the share, coin or barrel.

In 2018 ESMA reported that 74–89% of retail CFD accounts typically lose money. That is ESMA's figure for CFD accounts, measured across providers' own disclosures; it is not a figure for all trading. EU providers must show their own percentage in a risk warning.

ESMA's retail rules include leverageBorrowed power: control a big position with little money. caps, 50% margin close-out, negative balance protectionYou cannot lose more than your deposit. and a ban on most incentives. See Leverage and Margin.

Related

Sources & studies

  1. ESMA: ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors
  2. Investopedia (secondary): Contract for differences (CFD)

MarketsLeverageMargin

Last checked: 2026-11-04 · Educational, not financial advice.

Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.