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CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. 79% of retail investor accounts lose money when trading CFDs over the last 12 months. CFDs come with a high risk of losing money rapidly due to leverage and can be closed quickly due to margin calls. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. 79% of retail investor accounts lose money when trading CFDs over the last 12 months. CFDs come with a high risk of losing money rapidly due to leverage and can be closed quickly due to margin calls.

Fair value definition

Fair value has two meanings to investors.

  1. Generally, it is used to mean the value attributed to a stock by an individual investor or broker.
  2. In futures trading, it can refer to the predicted price of a market which is reflected in the cost to open a position.

In many companies, the fair value of stock can be subject to much debate among investors. Technology companies that show promise but not profit can have fluctuating fair values from different brokers and investors, for example.

The fair value of a futures trade will reflect whether the seller believes that the market is going to go up or down before the futures contract expires.

At IG Bank, futures bets and CFDs do not reflect this: the cost of the spread reflects the extra funding needed to keep the position open for the duration of the bet (and any dividend adjustments if you are trading equities).

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