The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate. 71% of retail client accounts lose money when trading CFDs, with this investment provider. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how this product works, and whether you can afford to take the high risk of losing your money.
CFD Accounts provided by IG International Limited. IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority.
IG provides an execution-only service. The information in this site does not contain (and should not be construed as containing) investment advice or an investment recommendation, or an offer of or solicitation for transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result.
The information on this site is not directed at residents of the United States and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
IG International Limited is part of the IG Group and its ultimate parent company is IG Group Holdings Plc. IG International Limited receives services from other members of the IG Group including IG Markets Limited.
As a seasoned financial expert with a profound understanding of the complexities surrounding financial instruments, particularly Contract for Difference (CFD) trading, I bring a wealth of knowledge and experience to shed light on the risks and considerations involved in such investments.
Let's delve into the statement you provided and break down the key concepts:
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Risks of Loss in CFDs: The statement rightly emphasizes the substantial risks associated with investing in CFDs. CFDs are derivative products that allow traders to speculate on the price movements of various financial instruments without owning the underlying assets. The use of leverage in CFD trading amplifies both potential profits and losses, making it a high-risk endeavor.
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Statistics on Retail Client Accounts: The assertion that 71% of retail client accounts lose money when trading CFDs highlights the inherent riskiness of these financial instruments. This statistic underscores the importance of caution and informed decision-making when engaging in CFD trading.
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Complex Nature of CFDs: CFDs are described as complex instruments. This complexity arises from the intricate nature of the contracts, the use of leverage, and the rapid fluctuations in the market. Traders need a comprehensive understanding of these complexities to navigate the risks effectively.
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Warning on Understanding the Product: The statement emphasizes the importance of understanding how CFDs work. This warning is crucial because investors need to grasp the mechanics of CFD trading, including leverage, margin requirements, and the potential for rapid capital loss. Lack of understanding can lead to significant financial pitfalls.
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Bermuda Monetary Authority Licensing: The mention of IG International Limited being licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority adds a regulatory perspective. Licensing by a reputable authority indicates a level of compliance and oversight, offering some assurance to investors.
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Execution-Only Service: IG International Limited is identified as providing an execution-only service. This means that they execute trades on behalf of clients without providing advisory or personalized investment recommendations. Clients are responsible for their investment decisions.
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Disclaimer on Investment Advice: The statement explicitly disclaims any investment advice or recommendation. This is a crucial disclaimer, as it clarifies that the information provided is not tailored to individual circ*mstances and should not be construed as financial advice.
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Restrictions on Geographic Distribution: The information on the site is not directed at residents of the United States and is not intended for distribution to or use by individuals in jurisdictions where such distribution or use would violate local law or regulation. This reflects compliance with international legal standards and underscores the need for adherence to local regulations.
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Corporate Structure and Group Affiliation: IG International Limited is revealed to be part of the IG Group, with its ultimate parent company being IG Group Holdings Plc. The mention of receiving services from other members of the IG Group, including IG Markets Limited, highlights the interconnectedness within the corporate structure.
In summary, the provided statement encapsulates the multifaceted nature of CFD trading, emphasizing its high-risk profile, regulatory considerations, and the importance of investor education and discretion. The disclosure of statistical data, regulatory licensing, and disclaimers reflects a commitment to transparency and responsible financial practices.
