The US stock index futures exchanges (CME) stopped all CFD trading in the USA.
What is a CFD?
As you know, the CFD market is extremely popular in both the UK and USA. However, CFD trading has been banned in the USA since 2012.
To get around this ban, many brokers started offering a new type of contract that allowed traders to speculate on currencies – the Contingent Forward FX (or CFP).
The CFP has a lot of similarities with the futures markets. One contract represents $10,000 worth of currency, and they trade both on an exchange and OTC.
What is the problem?
The problem is that these contracts are not as transparent as the more common CFDs. There were rumours that some brokers were manipulating prices to their advantage by either setting lower limits for price movements or by rigging quotes.
Nevertheless, CME’s decision to stop all trading in … Read more