Trading Financial markets : City watchdog clamps down on CFD trading

Long, short, Bitcoin, forex - Plenty of alternate market disuccsion.
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Euler
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Tue Dec 06, 2016 8:55 am

Britain's financial watchdog proposed tougher rules for retail financial spread betting products known as 'contracts for difference' (CFD) after finding that 82pc of customers using them lost money.

CFDs, including spread bets and rolling spot foreign exchange products, are agreements between two parties to exchange the difference between the opening price and closing price of a contract.

Let's take a look at the package of measures the FCA is proposing. They are intended to "enhance consumer protection" by limiting the risks of CFD products and ensuring that customers are better informed, the City watchdog said, after an analysis found 82pc of clients lost money on these products.

Here's a list of the new measures:

Introducing standardised risk warnings and mandatory disclosure of profit-loss ratios on client accounts by all providers to better illustrate the risks and historical performance of these products.

Setting lower leverage limits for inexperienced retail clients who do not have 12 months or more experience of active trading in CFDs, with a maximum of 25:1.

Capping leverage at a maximum level of 50:1 for all retail clients and introducing lower leverage caps across different assets according to their risks. Some levels of leverage currently offered to retail customers exceed 200:1.

Preventing providers from using any form of trading or account opening bonuses or benefits to promote CFD products.

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Dallas
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Tue Dec 06, 2016 9:08 am

There is one well known platform out there (cant remember the name) but when you sign up it asks you for how many 'years experience' you have with trading CFD's - if you select less than 1 year it pops up a nice warning says they wont accept your registration due to your inexperience.

But this box can then just be closed and a new number of years selected and hey presto your now experienced and can finish your registration and begin using there platform.

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Euler
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Tue Dec 06, 2016 3:36 pm

Sell off on IG looks overdone

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Euler
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Thu Dec 15, 2016 12:29 pm

I'm buying at the current levels. Here is some research which is suggesting the same thing.

http://www.alignresearch.co.uk/spreadbe ... bombshell/

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