The gambling that wears a suit: Forex, commodities and CFD Trap – III
by Prof. C. A. Saliya (The third instalment in a five-part series on the business of gambling, legal and illegal.) Somewhere in the fine print of every trading app you’ve ever seen advertised on social media, there’s a sentence that almost nobody reads all the way through. It usually says something like this: “77% of […]
In the third part of a five-part series on the world of gambling, both legal and illegal, Prof. C. A. Saliya highlights the dangers of trading Contracts for Difference (CFDs) and other financial products. Despite a clear legal warning that 77% of retail investors lose money when trading CFDs, millions of people, including many in Sri Lanka, continue to sign up for these services, believing they can turn a profit.
The issue lies in the way these products are packaged and marketed to consumers. CFDs are essentially bets placed on the price movement of commodities, currencies, or stocks, with brokers offering leverage to amplify potential profits and losses. This leverage can easily turn a small price fluctuation into a significant gain or loss, making the trading environment feel like a casino.
What exacerbates the problem is the use of psychological tricks by trading apps to manipulate users' perceptions, making wins feel like near-misses and encouraging repeated trading. While some argue that responsible and informed trading can be likened to legitimate investing, the reality is that most users are inexperienced individuals targeted by slick marketing campaigns.
This situation is particularly concerning in Sri Lanka, where the country's new gambling regulations do not cover CFD trading or forex trading, creating a legal loophole that allows these services to operate without proper oversight. As a result, young people are being exposed to high-risk financial products without adequate safeguards, much like walking into a casino with little understanding of the inherent risks.
Written by urgent.news from The Island Sri Lanka's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
