Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. This is particularly relevant when considering trading volatile currency pairs like the Euro Dollar (EUR/USD).
When engaging in spread betting and CFD trading, especially with currency pairs such as the Euro Dollar, it’s crucial to understand the implications of leverage. Leverage can significantly amplify both potential profits and losses. For instance, with a relatively small initial deposit, you can control a much larger position in the Euro Dollar market. While this can lead to substantial gains if the Euro Dollar moves in your favor, it can also result in equally significant losses if the market moves against you. It is important to remember that a high percentage of retail investors experience financial losses when trading these types of products.
Professional clients trading spread bets and CFDs can lose more than they deposit. This underscores the amplified risk inherent in leveraged trading, regardless of whether you are trading the Euro Dollar or other assets. The potential for losses to exceed your initial investment is a critical factor to consider before engaging in such trading activities.
Options and futures are also complex instruments which carry a high risk of rapid financial loss due to leverage. These are not suitable for the majority of investors, especially those new to trading or unfamiliar with the intricacies of these financial products. Before investing in options or futures, including those related to currencies or indices that may involve the Euro Dollar, it’s essential to assess your understanding of how these instruments function and the extent of risk involved. You must be prepared for the possibility of losing more than your original investment.
Trading stocks and shares ‘on margin’ within a US options and futures account adds another layer of risk. Margin trading, where only a portion of the position’s cost is financed, magnifies potential losses beyond the initial investment. This risk is not limited to stock and share trading; similar margin-related risks apply when trading currency pairs or other assets. Furthermore, margin trading incurs additional costs, and securities purchased on margin may be held as collateral, restricting shareholder rights and the ability to utilize the securities until the margin trade is settled. Thorough understanding of these risks is paramount before undertaking margin trading.
The value of shares, ETFs, and other ETPs acquired through various investment accounts can fluctuate, leading to potential losses. Whether you’re investing in stocks, ETFs, or instruments linked to currency markets, including the Euro Dollar, the principle remains the same: investment values can decrease as well as increase. Past investment performance is not indicative of future results. Certain ETPs may carry additional risks based on their structure, requiring investors to fully understand these differences before investing.
Share dealing and IG Smart Portfolio accounts are provided by IG Trading and Investments Ltd, CFD accounts and US options and futures accounts are provided by IG Markets Ltd, and spread betting is provided by IG Index Ltd.
IG operates under the trading name of IG Trading and Investments Ltd, IG Markets Ltd, and IG Index Ltd, all registered in England and Wales with a registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. These entities are authorized and regulated by the Financial Conduct Authority in the UK.
It is important to note that the information provided is not intended for residents of the United States, Belgium, or any country outside the UK, and is not intended for distribution or use in any jurisdiction where such distribution or use would violate local laws or regulations. This risk disclosure applies to all trading activities offered by IG, including those involving the Euro Dollar and other financial instruments.
