Contract for difference

The FCA glossary points to article 85 of the Regulated Activities Order. In summary, it covers rights under a contract for differences, or under another contract whose purpose is to secure a profit or avoid a loss by reference to fluctuations in the value of property, an index, or another factor named in the contract. The FCA's firm page treats spread bets and rolling spot FX as part of the CFD product area it supervises. COBS 22.5 then limits how leveraged CFDs, spread bets and rolling spot FX contracts are marketed and sold to retail clients. A CFD does not give ownership of the share, currency or commodity it refers to. Loss can exceed the margin posted, except where negative-balance protection applies.