Contracts for difference

LAGOS (Capital Markets in Africa) – Contracts for difference, or CFDs, have hastened the demise of an Irish bank, triggered Ponzi schemes in Chile and featured in a $100 million U.S. insider-trading racket. More recently, they’ve spooked European regulators because of the risks they pose to retail investors. There are proposals to cap potential investor losses and to ban advertising of CFDs, which are pitched to investors via television commercials and sponsorships of soccer clubs from Real Madrid to…