Update on Contract for Differences and how can FD Legal Help

Contracts for differences (CFDs) are financial products that allow an investor to speculate on the price of an asset without having to own it.  Usually, the contract is between the investor and a financial institution in which investors take a position on the future value of an asset. Trading in CFDs can involve significant risks, which may result in the investor losing all their investment to the financial firm.

At FD Legal we have assisted CFD investors in a variety of complaints involving CFDs.  Typically, these complaints involve:

• Poor disclosure of risk by the financial firm with the investor not understanding the risks involved
• Poor assessment of suitability by the financial firm to ascertain if CFD were suitable for their customers
• Misrepresentations made by CFD sales agents or representatives inducing investors to trade CFDs
• Incorrect assessment of wholesale investor status.

We are also aware of increasing complaints involving CFD variations involving options over CFDs.  These are called “knock out options” which allow retail consumers to trade using leverage against the underlying CFD.  These products can carry significant risks which are not suitable to retain investors.  In our experience significant losses can result in significant losses.

We encourage investors to contact FD Legal if you have a complaint in respect of trading in CFDs or have concerns in respect of your use of knock out options.  Contact FD Legal on 1300 433 533 or enquiry@fdlegal.com.au to discuss your circumstances.

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