The impact of provider-specific factors on the profitability of contract for difference traders

Viktor Hřebačka

Finance Research Letters, 2022, vol. 45, issue C

Abstract: This paper uses statistics about profitability of the provider's clients to examine whether the providers have an impact on the profitability of retail CFD traders. Using OLS method and estimated nonparametric confidence intervals, the influence of three provider-specific factors were tested: height of minimum deposit, height of transaction costs, and ability of the provider to trade on its own account. The model was estimated both using pre-COVID-19 pandemic data and data gathered during the pandemic. Statistically significant influence of the transaction costs was observed in both periods. The influence of height of minimum deposit was significant only before the pandemic.

Keywords: Contract for difference; Retail trading; Minimum deposit; Dealing desk; Trading profitability (search for similar items in EconPapers)
JEL-codes: C14 C51 G10 G24 G28 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:45:y:2022:i:c:s1544612321002567

DOI: 10.1016/j.frl.2021.102201

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