Subscribe
|
|
|
|
|
|
|
News

Bitpanda launches CFDs for crypto trading

Wednesday 19 April 2023 15:36 CET | News

Austria-based fintech Bitpanda has announced including CFDs in its product range.

Contracts for Difference, or CFDs, are a financial product that enables speculative trading with borrowed capital. CFDs for trading cryptocurrencies such as Bitcoin, Ethereum, or Solana are available on the company's investment platform under the name "Bitpanda Leverage". These products essentially make it possible to bet on rising or falling prices, also known as going "long" or "short". In practice, this means that if the Bitcoin price rises by 10%, for example, the price of a Bitcoin short CFD with a single leverage falls by 10%. A Bitcoin long CFD with a double leverage, on the other hand, would rise by 20%.

Bitpanda points out the risk associated with CFDs

According to the Bitpanda press release, CFDs are a complex financial instrument and carry a high risk of losing money. The vast majority of retail accounts lose money on this trade. Therefore, Bitpanda stresses that investors should consider whether they understand how CFDs work and whether they could afford to risk their money. A Bitpanda representative describes the product offering as a new way to trade the crypto markets in the short term. Bitpanda had already made the new CFD products available to a limited number of customers at the end of 2022. Now they are being rolled out to all traders on the Bitpanda app.

Bitpanda launches CFDs for crypto trading

Possible losses limited to initial stake

One of the risks of CFDs is that in the worst case, price losses can even exceed the original investment and users not only lose their invested capital but even have to pay an additional amount. This is the so-called obligation to make additional payments (Nachschusspflicht). In Germany, the financial regulator already banned one of these obligations for CFDs in 2017.

However, this is not relevant for Bitpanda Leverage. A so-called margin close-out control is implemented in the products, which means that a long or short position is automatically closed as soon as losses reach 50% of the original margin. A negative balance control ensures that potential losses on a position are limited to the amount originally invested. Regarding the fee structure, Bitpanda announced that it would not charge any direct purchase fees. However, a 1% exit fee is charged when closing long leverage positions. If positions are held overnight, a daily management fee of 0.1% on the leverage amount is due.

Source: Link


Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: cryptocurrency, product launch, investment, Bitcoin
Categories: DeFi & Crypto & Web3
Companies: Bitpanda
Countries: Austria
This article is part of category

DeFi & Crypto & Web3

::: more

Bitpanda

|
Discover all the Company news on Bitpanda and other articles related to Bitpanda in The Paypers News, Reports, and insights on the payments and fintech industry:





Industry Events

Free Headlines ::: subscribe now
RSS ::: follow ThePaypers via RSS ::: connect
LinkedIn ::: connect with ThePaypers on LinkedIn ::: connect
Twitter ::: follow ThePaypers on Twitter ::: follow
Facebook ::: like ThePaypers on Facebook ::: like