CFD Investors - The risk appetite of investors in the focus of CFD trading!

For which investors are CFDs suitable?

For this reason, trading is not the right choice for every type of investor. In any case, one should carefully consider the existing risks in advance.
Investors should be willing to take risks:

Trading with CFDs is considered a real alternative to trading with warrants and leverage certificates. In a direct comparison, however, CFDs offer some important advantages:

•     low fees for orders.
•     no search for suitable products, since there is only one underlying per CFD.
•     Volatility, time value loss or knock-out thresholds do not play a role in CFDs, which is why it is easier to track the price development.
•     Leverage can be set variably

Despite all the advantages, traders should always keep in mind that trading CFDs remains a risky business. For example, with a leverage of 10, a total loss must be expected in the event of a ten percent drop in price. In contrast, with a leverage certificate or warrant, there is a chance that they will recover over time.

Without hedging, the loss can exceed the amount of the investor's deposit.

For investors who are careless in their trading, it can be particularly expensive. If the price moves in the opposite direction to the desired, the loss can exceed the deposit made. However, most brokers strive to provide the best possible protection. Positions that are threatened by a total loss are closed out by an offsetting transaction.

If it should come nevertheless so far that a loss can be covered no longer by the credit, the dealer receives a so-called margin call. With this he is pointed out to the fact that new capital must be made available. If this does not happen, the position is closed by the broker for security reasons.

Traders have the opportunity to limit the possible risk of loss by setting stop and limit orders. Nevertheless, trading CFDs in Exness client area is generally only something for investors who are willing to take risks.

Choosing the right broker

Another important criterion for the risk is the respective broker; the decision for the suitable provider is therefore very important. If the broker becomes insolvent, deposits are only protected up to a certain amount. Our tests and experience reports provide important assistance on deposit protection. These tell traders which brokers manage customer deposits and their own funds separately, thus ensuring optimum protection for the trader.
Expert Tip:

Trading with CFDs is primarily suitable for traders who are quite willing to risk losses for higher income and can deal with uncertainty. However, those who want to trade CFDs should also keep a good money management so that they do not go into the red.

CFD trading exerts a special fascination on many traders or investors. If it runs well, high profits can be achieved very quickly. Nevertheless, the risk should never be lost sight of. The best protection against losses is the selection of the right broker for CFDs as well as sufficient basic knowledge and discipline when trading.

Our broker comparison supports you in finding the right broker - individually tailored to your personal requirements. Also take a look at our comprehensive ratings and tests. Here you have the opportunity to download reviews as a presentation - and thus find the right broker, whether you want to trade stocks, CFD, Forex or commodities.