The Coronavirus-induced chaos in the financial markets during recent months has been a boon for the City’s spread-betting firms. Investors in these derivatives trading firms must now try to gauge how long the surge in business will last.
Spread-bets and contracts-for-difference are risky and complex financial instruments that enable punters to make leveraged wagers on the direction of shares, currencies, commodities and bonds.
The leverage means that traders stand to make lucrative profits from relatively small stakes if they call the market correctly. On the downside, the leverage can magnify losses if bets go wrong. The majority of amateur traders suffer losses.
The Covid-19 crisis, which has roiled markets around the world since February, has fostered fertile conditions for sellers of the derivatives, including the