Request for CFD margin call calculation

The FCA required risk warning means that: measured over 1 year, and recalculated every 3 months, 76% of accounts lose money.

  • It does not mean that 76% of positions are closed at a loss, or that ones closed at a loss are of the same magnitude as those closed at a gain.

Consider a coin that show tails with probability 0.51, a small bias from 0.50. The probability that in 1400 tosses there are more tails than heads is 0.765.

n = 1400; p = 0.51
Sum[Binomial[n, k] p^k (1 - p)^(n - k), {k, n/2+1, n}]
0.764796
  • The 76% figure tells us little about a CFD platform provider’s actual profit. It could be, for sake of argument, that the mean loss in a losing account is 1,000. But the mean gain in a winning account is 3,000. Net to the provider would be
    0.76 x 1000 - 0.24 x 3000 = 760 - 720 = 40 per account.

  • One has to think, plan and understand, but CFDs are not indecipherable. There is after all a practice account, staff help to explain, and users like us are free to share insights on this community.

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