Advertisement
Open an Account With the Lowest-Cost Broker

Crypto CFD gap risk

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 Bybt.com 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.

Author of this article

Krisztián Gátonyi

Author of this article

Krisztián has 15 years of experience in proprietary trading, mainly in the interbank currency market as a foreign exchange risk manager. He received his MSc degree in International Business from the University of Middlesex. He is interested also in real estate and dividend growth investing. His purpose is to help people find the best investment provider.

Krisztián Gátonyi

Senior Broker Expert

Krisztián has 15 years of experience in proprietary trading, mainly in the interbank currency market as a foreign exchange risk manager. He received his MSc degree in International Business from the University of Middlesex. He is interested also in real estate and dividend growth investing. His purpose is to help people find the best investment provider.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

Share

Comments

×