74-89% of retail accounts typically lose money trading contracts for difference, with average losses per client of €1,600 to €29,000, according to analyses by national regulators across EU jurisdictions reported by ESMA (2018) in press release ESMA71-98-128. A contract for difference (CFD) is a leveraged derivative that pays the change in an asset's price without the trader owning the asset. The release, "ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors," announced the rules that put a loss percentage on every EU CFD broker's risk warning.
What the Study Found
The 74-89% range is not one study. ESMA's Decision (EU) 2018/796 names the endpoints. A French regulator study found more than 89% of retail investors lost money overall. An Irish follow-up review found 74% of retail clients lost money. Retail leverage was capped at 30:1 for major currency pairs and 20:1 for non-major pairs, gold and major indices. The caps fell to 10:1 for other commodities and indices, 5:1 for single stocks and 2:1 for cryptocurrencies. Margin close-out was standardised at 50% of minimum required margin, and negative balance protection capped a retail client's loss at the money in the account.
"NCAs' analyses on CFD trading across different EU jurisdictions shows that 74-89% of retail accounts typically lose money on their investments, with average losses per client ranging from €1,600 to €29,000."
ESMA (2018), ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors, ESMA71-98-128.
Methodology
ESMA used its product intervention power under Article 40 of MiFIR, which restricts a product EU-wide for three months at a time. The evidence came from the national competent authorities of member states, each analysing CFD accounts at brokers it supervised. Decision (EU) 2018/796 of 22 May 2018 applied from 1 August 2018. ESMA renewed it in three-month steps until 31 July 2019. By then most national regulators had adopted permanent rules at least as strict.
Key Statistics
| Metric | Finding | Context |
|---|---|---|
| Retail CFD accounts that lose money | 74-89% | Range across national regulators' analyses (ESMA, March 2018) |
| Average loss per client | €1,600 to €29,000 | Same analyses |
| French regulator study | More than 89% | Retail investors who lost money overall |
| Irish follow-up review | 74% | Retail clients who lost money |
| Maximum retail leverage, major currency pairs | 30:1 | Falls to 2:1 for cryptocurrencies |
| Provider loss percentage recalculated | Every 3 months | Covering the preceding 12 months |
Provider-Specific Warning vs Standard Warning
| Measure | Provider-specific warning | Standard warning |
|---|---|---|
| Text | "[insert percentage per provider] % of retail investor accounts lose money when trading CFDs with this provider." | "Between 74-89 % of retail investor accounts lose money when trading CFDs." |
| Basis of the number | The broker's own retail accounts, recalculated every 3 months over the preceding 12 months | The range from national regulators' analyses |
Why This Matters
The 74-89% figure is the one most often borrowed for "most traders lose money," and it measures something narrower. It counts retail CFD accounts at EU brokers, not people and not day traders, and an account can hold positions for weeks. It is the only loss rate regulators make brokers print on every page, which is why it appears in so many answers. The broker-specific figure on an EU CFD site today is that broker's own trailing 12-month number, not ESMA's 2018 range. For how it compares with day-trading studies, see Do 97% of day traders lose money?.