As a retail CFD trader, who benefits when I lose money?

External question — Personal Finance Stack Exchange Author: gaut Original post: https://money.stackexchange.com/questions/152706 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Who wins when I lose money as a retail CFD trader? Unlike Futures or other regulated assets, CFD's may not require a buyer counterpart (or the broker might play this role)... I suspect the broker loses when I make money on CFD's, not some other trader making opposite bets. Is that the case?

External answer — Personal Finance Stack Exchange Author: D Stanley Original post: https://money.stackexchange.com/a/152707 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Every trade requires a counterpart at some point. Brokers typically only facilitate transactions between parties and an exchange (who facilitiates the transaction with the counterparty(ies), or possibly between individual traders. It would be highly unusual for the broker to be the party on the other end of your CFD. They may be on the contract , but more than likely they would have an offsetting position with someone else in that case. They rarely have "skin in the game". However, that doesn't necessarily mean that the other party "won" if you "lost". They may be using the CFD to hedge some other position, and come out even.