Published on November 10, 2024 at 5:46 p.m. / Modified on November 10, 2024 at 7:12 p.m.
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Trading platforms are generally very profitable and have attracted many new customers during the pandemic.
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Some financial products they offer cause losses for the majority of customers who use them.
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Trading platforms do not bet against their clients, but act differently depending on a client’s profile, whether they are very speculative or more reasoned.
Sometimes almost 70%. Often 50%, or even 64%. This is the percentage of customers of online trading platforms active in Cyprus who lose money by trading using CFDs, “contracts for differences”. These platforms are required by European regulations to publish this type of statistics. CFDs are derivative products allowing you to bet on the upward or downward movement of an asset – stocks, currencies, stock indices, etc. – without having to hold this asset. CFDs therefore facilitate access to markets thanks to the leverage offered to investors, which can easily reach 20 times in Europe. Sometimes much more in other jurisdictions.
This means that, to bet on the evolution of a package of shares worth 100,000 euros, a stock marketer will need to deposit only 5,000 euros. If things work out in his favor, his winnings will be multiplied compared to his actual initial stake. But otherwise, the losses will be calculated on his position – 100,000 euros in this example – which exposes him to significant losses. CFDs, although banned in the United States, are currently very popular in online trading, the world’s largest casino, which has seen its number of customers explode during the pandemic.
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