Do CFD brokers ban profitable clients from trading on their platform, since these clients make them lose money?

External question — Personal Finance Stack Exchange Author: curious Original post: https://money.stackexchange.com/questions/157886 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Many CFD brokers make money from trading against their clients and profitable clients make them lose money. This is similar to how casinos operate. Casinos ban profitable customers. Do CFD brokers do the same thing? Has anyone have personal experience or know of people who were banned?

External answer — Personal Finance Stack Exchange Author: D Stanley Original post: https://money.stackexchange.com/a/157894 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. Casinos ban profitable customers. This is not true. The business model of a casino is not to beat everybody . It relies on the fact that for every game, the odds are tilted to the house. Yes some players might beat the odds and win big, but in the long run the house always wins . In fact, casinos tend to celebrate winners to get more people to come to the casino thinking that they might be the next "big winner". Casinos do ban cheaters , but it's obviously because they cheat, not just because they are winning. It's actually similar for CFD brokers. Their business model is not to be on the right side of the bets, but to profit on the bid/ask spreads over time. They can hedge their risk overall in various ways, either by trading the opposite side of a CFD with other clients, or using derivatives to hedge their exposure. They're not profitable by being "lucky". EDIT: To be fair to a comment, card counting at blackjack is not technically cheating but it frowned upon because it skews the odds against the house. However, I also wanted to add a personal anecdote the other way in a financial market. When ICE was getting established as an internet-based trading platform for energy commodity trading, I knew a trader who had traders on the NYMEX floor at the ready, and would look for arbitrage opportunities between the exchange floor and the ICE platform. He would make so many trades on ICE that they didn't care that his trades were profitable, because it increased their overall volume. Since they were just a platform, they were not harmed by the arbitrage, so it made no difference to them. The same could be applied for CFD brokers, who are not taking active positions but are either matching up trades or using derivatives to hedge their exposure. They don't care if you make money overall or not; they profit by enabling trades and increasing volume.

External answer — Personal Finance Stack Exchange Author: SMALLS Original post: https://money.stackexchange.com/a/159258 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I agree with Stanley Brokers has no interest to hold profitable traders , they put all your positions monitored for 3 months . They try all to get rid of you if you are very profitable trader.

External answer — Personal Finance Stack Exchange Author: InvoAngelus Original post: https://money.stackexchange.com/a/162809 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. CFD brokers do not ban clients, that's the short answer. To elaborate a bit, the premise of your question is mistaken. Most of the CFD trade volume today is done on ECN, a global network for matching trades to put it simply. Brokers offering access to ECN do not take opposite positions from their clients, but charge various fees to connect you, usually commission per lot, so their interest aligns with a profitable trader, ie. more and larger trades earn larger commissions. This makes your question irrelevant, since brokers are not incentivised to ban profitable traders. On the other hand, traditional dealing desk brokers do take positions against their clients, although there are various ways for them to "hand off" this position and still earn from spread. For such a broker, the obvious conflict of interest is that a profitable trader costs them money. However, since prices are set by the broker and requotes can happen (a different price on your trade than what you initially set), there is no reason to outright ban anyone. Even if your initial premise was correct, I highly doubt anyone would have experienced being banned. More likely, they would have lost money and left on their own accord, if that was the broker's objective.

External answer — Personal Finance Stack Exchange Author: Eleazar Original post: https://money.stackexchange.com/a/166419 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. It depends heavily on the country where the broker is regulated. It is true that there are CFD brokers with abusive practices, that profit from trader's losses, however those brokers tend to have a very bad reputation and to be in a country with very poor financial regulation. As long as you make sure your broker is well-regulated and in a country where the judiciary system is effective, you shouldn't have problems.