FCA Issues Warnings To Consumers And Investors About Contracts For Differences

Contracts for Differences or CFDs are complex financial products used to speculate on the movement in prices on a wide range of assets. As a result, they carry a considerable risk of substantial losses.

Indeed, the FCA recently issued a warning to investors in CFDs against giving up vital consumer protections. The FCA is concerned that firms are using high-pressure techniques to encourage investors to claim they are professional clients, putting them at risk of losing more money than they can afford. According to the FCA, the retail client protections, including leverage limits and client loss protections, prevent nearly 400,000 people a year from risking more than their original stake in CFDs and provide between £267 million and £451 million worth of protection.