Crypto CFD gap risk

Written by
Krisztián G.
Fact checked by
Tamás D.
3w ago

Cryptos can be bought in CFDs as well. CFDs are financial contracts that pay the differences in the settlement price between the opening and closing of a trade. There is no delivery of physical goods or securities.

These are leveraged products which are not available 24/7 like the cryptocurrency market. There are market openings and closings, therefore crypto CFDs can open with large gaps during high volatility. 

Gaps are sharp breaks in price with no trading occurring in between. Cryptos are highly volatile products and if you buy them in CFD you can lose more than your initial capital, as losses are based on the full value of the position, rather than just the margin deposit.

According to data in May 2021, more than 775,000 traders have had their account liquidated in a single day, which equals $8.6 billion worth of crypto.

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Author of this article

Krisztián Gátonyi

Forex • Market Analysis • Stock Market

I have 15 years of experience in proprietary trading, mainly in the interbank currency market as a foreign exchange risk manager. I'm actively involved in reviewing the 100+ brokers listed on our site. I personally open accounts with real money, execute trades, test customer services. I hold an MSc in International Business from the University of Middlesex. My purpose is to help people find the best investment provider.

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