Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74–89% of retail investor accounts lose money when trading CFDs.
Risk Warning
Please read this risk disclosure carefully before using any content on this website or opening a CFD trading account.
CFD Trading Carries a High Risk of Loss
CFDs (Contracts for Difference) are complex financial instruments that allow you to speculate on price movements without owning the underlying asset. Because they are leveraged products, both profits and losses are magnified relative to your initial deposit. You may lose more than your initial investment, and in some cases the entire balance of your trading account.
Retail Investor Loss Statistics
Between 74% and 89% of retail investor accounts lose money when trading CFDs. These figures are published by regulated brokers in accordance with requirements from regulators such as the FCA, ESMA, ASIC, and CySEC. You should carefully consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money before opening an account.
Leverage Risk
Leverage allows you to control a large position with a relatively small deposit (margin). While leverage can amplify gains, it equally amplifies losses. A small adverse price movement can result in a loss that exceeds your deposit. Leverage ratios for retail clients are capped by most regulators (e.g. 30:1 for major forex pairs under ESMA rules), but even modest leverage carries substantial risk.
Margin Calls and Stop-Outs
If your account equity falls below the required margin level, your broker may issue a margin call requiring you to deposit additional funds. If you fail to meet the margin call, the broker may automatically close one or more of your open positions at a loss. Stop-out levels vary by broker. Always review the margin requirements and stop-out policies before trading.
Overnight and Weekend Risk
Holding CFD positions overnight or over weekends exposes you to gap risk — the possibility that prices open significantly higher or lower than where they closed. This is particularly relevant for commodities, indices, and individual stocks that are sensitive to after-hours news. Overnight financing costs (swap rates) also accrue on leveraged positions held beyond the daily close.
Counterparty and Platform Risk
Most retail CFD brokers act as market makers, meaning the broker is the counterparty to your trades. Your position's value depends on the broker's price feed and financial solvency. Always use a broker regulated by a reputable authority (FCA, ASIC, CySEC, etc.) that holds client funds in segregated accounts and provides negative balance protection.
No Investment Advice
The content on The CFD Desk — including broker reviews, comparisons, calculators, and editorial commentary — is for informational and educational purposes only. It does not constitute financial advice, investment advice, trading advice, or any other type of advice. You should not treat any content on this site as a recommendation to trade any financial instrument. Always seek independent financial advice if you are unsure whether CFD trading is suitable for your circumstances.
Past Performance
Past performance of any broker, strategy, instrument, or analyst commentary featured on this site is not indicative of future results. Markets are inherently unpredictable, and historical data should never be used as the sole basis for a trading decision.
Suitability
CFD trading is not suitable for everyone. You should only trade CFDs if you fully understand the product and the risks involved, have sufficient trading experience, are able to financially withstand the loss of your entire investment, and are not relying on these funds for living expenses or essential financial obligations. If you are unsure, do not trade.
Last updated: June 2025. This risk warning is provided for informational purposes and does not replace any risk disclosures provided by individual brokers. Always read the broker's own risk warning and Key Information Document (KID) before trading.