Choice Research: Seeking Experiences with CFDs

CHOICE is looking into a risky investment product called contracts for difference (CFDs), in which you use mostly borrowed money to speculate on the price movement of a foreign exchange rate, an individual share, or a market index. Many Australians have lost heavily. We’re interested in speaking to people who have discovered the risks of CFDs the hard way.


24 posts were merged into an existing topic: Financial Investments - Shares, CFDs, Options, et al

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I interpret ‘the hard way’ as having lost money but @AndyKollmorgen might also appreciate those who have done well?

Without further digression on aspects of investing, has anyone reading ‘discovered’ the risks of CFDs the hard way?

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Could be waiting a long time for someone who has had a good experience gambling on CFDs. So far, no one. But then, anyone who knows about investing will choose better strategies than gambling.

I have personal experience with CFD. I traded them for a year and a half. I did loose some, but I wanted to dip my feet in to learn about trading ‘the hard way’. I did and I’m now trading successfully, but not using CFDs. The main difference with CFDs is that you can use leverage so this means you have to manage your risk more carefully. CFDs are also a bit different in that you borrow money using leverage and the interest you pay can be high. I paid something like 200% interest on one trade and it turned from winner to loser… One lesson learnt!


In searching for stockbroking firms that provide an Options Trading service and online tools, one stands out for me as being very concerning, ie, CMC Market Stockbroking. I say that because although they advertise themselves as providing a wide range of stockbroking services, almost benignly, Shares, ETFs, LIT, etc, all my contact to them has resulted in them marketing CFDs, and they regularly e-mail me with essentially ads for CFDs, even though I have clearly stated I have no interest in them. I haven’t received any help regarding my questions re Options.

I’m not interested in them because all my online reading says don’t touch CFDs with a barge poll, as your potential exposure to very high loss can be huge, as all margin loan schemes are.

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