Mis-sold CFD Investments
Before we delve further, it is important to know that CFDs or contracts for difference are a high-risk investment and you can actually lose more money than you initially invested if things go south, thus forcing you to pay more into the contracts for difference scheme.
So, if you are not a high-risk take, you might be wondering why in the world anyone would get into a CFD investment. Well, in some situations, people find themselves in the middle of all this as a result of mis-sold CFD Investment.
It’s Possible to Lose More Than Your Initial Investment
Of course, investing in something usually involves a certain risk, but some schemes carry more significant risks than others. For example; if you invest in an unregulated, high-risk investment like overseas property investments, if it goes south, there is a possibility of losing the money that you put into the scheme. However, with CFD trading programs, you could lose more than you initially put into the program.
Let’s say, for instance, you purchased £10,000 worth of CFDs and a 5% margin rate. That means that means that you just need to put a margin of £500. However, if the bet goes against you, which is not uncommon, by let’s say 10%, it means that you will have lost £1000, which is double the amount you invested. That means you will have to pay the extra £500 to cover the deficit.