Trading responsibly

Understanding leverage risk

Contracts for difference let you control a position far larger than the margin you set aside. That leverage works in both directions: a small move in the underlying price can produce a gain or a loss that is large relative to your deposit. Losses can exceed expectations and, in some cases, exceed the money you put in, so a position can be closed at a loss larger than your opening balance. Treat this as a risk inherent in the product, not an unusual event.

For the wider picture, see Why this site gives no stock tips, and how to judge any tip you meet and NGX trading hours and market holidays.

Trade only what you can afford to lose

Money set aside for essentials does not belong in a leveraged account. Before opening a position, decide what a total loss of that amount would mean for you, and keep speculative capital separate from savings and day-to-day funds. The broker may offer negative balance protection or margin close-out rules; read the terms that apply to your account rather than assuming them.

Set limits before you trade

• Choose a maximum loss per position and per period, and stop when you reach it.
• Use stop-loss orders and review them as conditions change.
• Size positions from your risk limit, not from the margin the broker requires.
• Keep a written record of entries, exits and reasons.

No promises of profit

Nothing on this page is a promise of profit, a forecast or a recommendation. Leveraged trading can result in rapid and repeated losses, and past outcomes do not indicate future results.

Shares of the local exchange are not CFDs here

This page concerns CFDs. Shares listed on the Nigerian Exchange are separate instruments and are not CFDs on this page; do not confuse the two when reading product descriptions.

Where to find help

If you are unsure whether a product suits you, or you are concerned about your trading, contact the financial regulator's consumer service for general guidance and complaints information. Support is also available through consumer protection bodies and, where relevant, debt and money advice services. Seek independent help early rather than trading to recover losses.