Contracts for Difference or CFDs enable speculative trading with borrowed capital. The Austrian crypto exchange BitPanda offers CFDs for trading cryptocurrencies such as Bitcoin, Ethereum, or Solana, which are available on the company’s investment platform under the name “Bitpanda Leverage.” These products make it possible to bet on rising or falling prices, also known as going “long” or “short.”
CFDs are a complex financial instrument with a high risk of losing money. The vast majority of retail accounts lose money on this trade. Therefore, Bitpanda advises investors to consider whether they understand how CFDs work and whether they can afford to risk their money. Bitpanda had already made the new CFD products available to a limited number of customers at the end of 2022. Now they are being rolled out to all traders on the Bitpanda app.
Bitpanda Leverage includes a margin close-out control, which means that a long or short position is automatically closed as soon as losses reach 50% of the original margin. A negative balance control ensures that potential losses on a position are limited to the amount initially invested. Bitpanda said that it would not charge any direct purchase fees. However, a 1% exit fee is charged when closing long leverage positions. A daily management fee of 0.1% on the leverage amount is due if positions are held overnight.
