The Financial Conduct Authority has warned that retail investors buying Contracts for Difference (CFDs) could be putting themselves at risk by giving up crucial consumer protections, with finfluencers pushing the product without explaining the full consequences.
A CFD is a financial derivative that allows traders to speculate on short-term price movements without owning the underlying asset, a flexible but highly leverageable, complex asset with a myriad of regulatory restrictions. The FCA said it 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". Retail investors have strong limits for how much they can borrow and protections in place to stop them losing more than they put in, the latter of which has pre...
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