For the majority of private investors, derivatives are a topic that they tend to stay away from or even distrust.

The small group that is more open to this asset class uses a variety of products.

The most well-known are probably CFDs (Contracts for Difference), not least thanks to intensive advertising by brokers.

With CFDs, you can speculate on the change in value of an underlying asset over a certain period of time without having to purchase it.

In this way, larger investment sums can be moved with less money.

Martin Hock

Editor in Business.

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According to figures from the CFD Association, the popularity continued to rise last year. With a record volume traded of EUR 2.3 trillion, the previous year's figure and a good EUR 200 billion were exceeded.

The interest is consistently high, says association chairman Rafael Neustadt, and is not driven solely by situations such as the corona crash in spring 2020.

Investors would have relied on CFDs throughout 2021 in order to be able to react efficiently.

In the first quarter of this year, another record was reached with a trading volume of 637 billion euros.

Market volatility is extremely high because of the Ukraine war;

in such an environment, investors often resorted to CFDs.

Contracts on equity indices were traded most frequently, with the Dax still accounting for half of the volume, although the Nasdaq Composite gained significantly in importance, increasing its share from 6 to 12 percent.

More money per transaction

However, the number of transactions declined significantly in the previous year, falling by around 22 percent to around 72 million orders.

The association cites the extreme volatility in the corona crash year 2020, which encouraged investors to be more active than the average, as the reason for this.

In 2021, however, there was still more trade than in the pre-Covid period.

The basis for the record volume is therefore another increase in the average transaction volume by around 40 percent to just under EUR 32,000.

The number of accounts in Germany has also increased, by 12 percent to around 292,000.

On average, however, each investor uses 2.3 accounts, so that their number can be roughly estimated at 125,000.

Although this shows that the feared negative effects of the stricter regulation established a few years ago are at least within limits, according to a survey of 2000 investors by the association, they are still dissatisfied with the political framework.

72 percent critically assessed the political and tax measures in Germany to set up private old-age provision.

Almost as many said they would likely stop CFD trading if conditions tightened further.

On the other hand, 73 percent of those surveyed were of the opinion that CFDs would contribute to an improvement in the German investment culture.

Against this background, the association is of the opinion that the restriction on tax loss offsetting must be reversed as quickly as possible, says Neustadt.

In addition, he renewed the association's demand to introduce an additional investor category of semi-professional investors.

CFD investors currently have to classify themselves as either "professional" or "private", with high requirements being placed on the former category.

Investors classified as private are subject to various restrictions in trading, which are intended to protect them from excessive losses.

The most recent association survey once again confirms the image of an informed public that is willing to take risks.

According to their own statements, 85 percent of those surveyed deal with investing on a daily basis.

Almost half made more than 100 transactions in the past year.

92 percent rate their trading style as at least "offensive".

Currently, 72 percent of retail investor accounts are losing money with common CFD brokers.

They are legally obliged to display this prominently on their website.

The current percentage is not exceptionally high.