Contracts for difference (CFDs) have been in the news recently following a call from the Association of Investment Companies (AIC – formerly the Association of Investment Trust Companies) to recommend changes in disclosure regulations. The association argues that these products are being used by some investors to build stakes in companies in a less than transparent manner.

CFDs are part of a growing trend of complex equity derivatives products that are gaining popularity among investors because they offer the potential to make money from stocks for a fraction of the price of buying them.