By Starling in Fluff — 12 Dec 2025

Retail CfD losses leaderboard

CfDs are complex instruments and come with a high risk of losing money, or so the warning goes. Many brokerages show this banner and say what percentage of retail clients lose money on CfDs with them. For the fun of it, let's rank them.

The leaderboard

I did a few web searches to find all the brokers available to UK retail investors. Below are the ones that offered CfDs along with what percentage of their clients lost money on these products. The Data section at the end of this post has links and screenshots of the warnings.

As a word of caution, these numbers are self-reported. Despite being unflattering, they could potentially be worse in ways we have no ways of knowing.

Broker	% of clients lost money on CfDs
eToro	46.0%
AvaTrade	57.0%
Interactive Brokers	57.4%
Vantage	57.7%
Saxo	58.0%
Capital.com	60.0%
IG	67.0%
Trading.com	68.5%
XTB	70.0%
Trading 212	71.0%
IC Markets	71.33%
Pepperstone	72.0%
Admiral Markets	73.0%
Trade Nation	73.1%
FxPro	74.0%
Plus 500	76.0%
OANDA	76.6%
Swissquote	82.75%

It's really telling that there is exactly 1 broker whose majority of clients made a profit. Most of the clients of the other 17 lost money. I assume the stats are updated regularly, so these numbers should be compared to a YTD gain of +24.77% (in EUR) for holding a STOXX 600 ETF or +17.69% gain (in USD) for holding an S&P 500 ETF.

This begs the question of why people are buying these given that they're more work than a passive index and that a majority of them will lose money. It's also interesting to see how brokers are making a profit off of these.

Contracts for Difference (CfDs)

Contracts for difference are a broad category of financial instruments. This Wikipedia page gives an overview and mentions how they're used to hedge electricity prices or to guarantee a profit to renewables developers. The Investopedia article focuses on the CfDs available to retail investors. For a well-explained sales pitch, see this Saxo page.

In short, the CfDs offered by the above brokers are bets that the price of some underlying asset, index, or commodity will go up or down. A client buying a CfD gets long exposure to the underlying and a client selling a CfD gets short exposure. These are contracts between the client and the broker, so the client never actually owns or short-sells the underlying—it's all make believe from their perspective. Since they're contracts with the broker, they're also not transferable across brokers like stocks and if the broker goes out of business, the value of the CfD likely goes to zero with no recourse to the client.

Why are CfDs so popular with traders?

If CfDs just give traders long or short exposure to the underlying, why would anyone ever prefer these over the actual underlying? I think the answers are availability and leverage.

A funny side-effect of the regulations in Europe is that retail traders (as opposed to those classified as "professionals") can't trade many asset classes. For example, for the longest time, I wasn't allowed to buy a SPY ETF in the US because the ETF hadn't registered with a regulator in Europe and hadn't provided the two-page key investor information document (KIID). There's little regulation around CfDs, though, so I would've been able to buy a CfD of the above ETF.

CfDs can also [usually] be traded on margin. Continuing the example, the SPY ETF CfD has an initial margin requirement of 20%. So, a trader with 10,000$ could buy 10,000$ of SPY or 50,000$ of the SPY CfD. If buying the dip appeals to people, I'm sure buying the dip with 5x leverage is even more appealing.

Why are CfDs so popular with brokers?

It's clear why traders might want to trade CfDs, but why do so many brokers offer them? To answer that, we must first see what a broker does in response to a client trade.

Suppose a client buys 100 of the SPY CfD. The client locks up 14,000$ and the broker is on the hook for 70,000$ worth of SPY. The obvious way to hedge this is to borrow 56,000$ and buy 70,000$ of SPY. If SPY goes up and the client closes their CfD position, the broker just sells SPY and gives the client the gains. If SPY goes down, the broker sells their SPY position at a loss and takes the money from client's account (which should have enough to cover the losses due to the maintenance margin requirement). If a client sells 100 of the SPY CfD, the same thing happens, but with the broker borrowing and short-selling SPY.

It's worth noting that no money actually changes hands between the client and the broker until the position is closed. As in, the client doesn't pay 14,000$ to buy the CfD. Rather, they need to have that much cash in their account as initial margin.

So, how does the broker make money? I think it's through a combination of interest, fees, and the buy/sell spread. First off, in the case where a client is buying, they're essentially borrowing money from the broker (and the broker is borrowing it from their prime broker). The broker charges the client a much higher interest rate than they themselves get charged. For example, Saxo charges benchmark plus 2.5%. That's 2.5% of low-risk profit.

The broker also charges fees for opening and closing CfD positions. These are sufficiently opaque that they're hard to compare to exchange fees, but it's another opportunity for profit.

Finally, the broker also determines the buy/sell spread of the CfD. Since these aren't traded on open exchanges, the client gets as competitive a price as the broker is willing to give them.

So, from a broker's perspective, CfDs are an opportunity to interpose themselves between a client and the asset they want to own, charging them interest and fees in the process while passing most of the risk along.

Conclusion

CfDs are popular with brokers because they're easy money and they're popular with retail clients because of availability and leverage. Given the leaderboard above where only one broker has a majority of its clients profit off of these and where there's one broker where 4 out of 5 clients lose money, I think it's safe to say brokers are the only ones winning here. In the UK, the FCA is aware of this situation, but they don't seem to be doing much about it.