The City regulator is warning that CFD trading is complex and losses can build up quickly, urging consumers to verify any firm through its official register before opening an account.
Around 82 per cent of clients in an FCA representative sample lost money trading contracts for difference, the Financial Conduct Authority has confirmed. A separate figure from FCA consultation evidence put the share of loss-making retail client accounts at 78 per cent. In a single three-month window from August to October 2017, retail consumers lost £268.4 million from CFD trading — a figure the FCA projected at roughly £1.07 billion on an annual basis.
CFDs are leveraged products that let consumers speculate on price movements without owning the underlying asset. That leverage cuts both ways. Retail leverage limits set by the FCA range from 30:1 down to 2:1, depending on how volatile the underlying asset is, and providers must close positions when a customer’s funds drop to 50 per cent of the margin needed to keep those positions open.
Checking a firm is authorised is the first step — but it’s not the whole picture. A firm appearing on the Financial Services Register does not automatically mean every service or product it offers is authorised. The FCA also flags that firms listed as “Applied to cancel” and EEA firms in “Supervised run-off” should not be taking on new UK clients at all.
FCA research cited in 2025 found that retail-client protections prevented nearly 400,000 people a year from risking more than their original stake in CFDs, providing between £267 million and £451 million in protection. Negative-balance protection — introduced with the main retail CFD restrictions in August 2019 — caps a retail customer’s losses at the funds held in their CFD account. Firms must also display a standardised risk warning showing the percentage of their retail clients who lost money, updated every three months using the preceding 12-month period.
Providers are banned from offering cash or other inducements to encourage retail consumers to trade CFDs, with the exception of permitted research and information tools.
Key information
- Use the FCA’s Firm Checker to verify whether a firm is authorised before opening a CFD account
- Check the Financial Services Register — but confirm the specific product or service you want is covered by that authorisation
- Consult the FCA Warning List for unauthorised firms and individuals operating in financial services
- Firms marked “Applied to cancel” or EEA firms in “Supervised run-off” should not be accepting new UK clients
Source: @TheFCA