Who wins when I lose money as a retail CFD trader? Unlike Futures or other regulated assets, CFD's may not require a buyer counterpart (or the broker might play this role)...

I suspect the broker loses when I make money on CFD's, not some other trader making opposite bets. Is that the case?

  • 1
    A CFD broker is a market-maker in a situation of no trading exchange. But the CFD broker can hedge their order imbalance on the futures market. If the CFD broker doesn't hedge their order imbalance then they are gambling the house. Ordinarily, the CFD broker just profits from the bid/ask spread.
    – S Spring
    Commented Sep 17, 2022 at 0:03
  • In this case, when someone is making money on the CFD market, the broker's counterparty on the futures market loses. Interesting to see this link between CFD and futures. (actually the first "loser" is probably someone on the CFD market who took an opposite position, since only the imbalance is hedged)
    – gaut
    Commented Sep 17, 2022 at 10:11

1 Answer 1


Every trade requires a counterpart at some point. Brokers typically only facilitate transactions between parties and an exchange (who facilitiates the transaction with the counterparty(ies), or possibly between individual traders. It would be highly unusual for the broker to be the party on the other end of your CFD. They may be on the contract, but more than likely they would have an offsetting position with someone else in that case. They rarely have "skin in the game".

However, that doesn't necessarily mean that the other party "won" if you "lost". They may be using the CFD to hedge some other position, and come out even.

  • If they are using the CFD to hedge they could actually come out losing less rather than winning
    – MD-Tech
    Commented Sep 16, 2022 at 15:31

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