CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
An investor compensation fund protects retail traders when a broker goes bust. It's always best to keep your account below the maximum level of compensation.
If a broker is unable to pay back the funds on your account, you can make a claim to the compensation fund and you will get your money back up to a certain amount.
The maximum level of compensation is different in every regulatory jurisdiction.
Funds held by CySEC regulated brokers are protected up to €20.000, funds at FCA regulated brokers are protected up to £50.000. If you are working with an unregulated broker, there is ofcourse no compensation fund to turn to.
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