When Your Clients Lose, Do You Win?

What CFD spreads, withdrawal disputes and losing traders can tell us about the business behind the trading platform

A few days ago, a post appeared on LinkedIn describing a dispute between a trader and a CFD broker. According to the author, a relatively ordinary gold trade had produced a profit, but a subsequent withdrawal request was rejected and the trading account was blocked because of what the broker allegedly described as suspicious trading activity.

We do not know enough about this particular case to decide who was right. There may be information that did not appear in the post, and financial institutions can have perfectly legitimate reasons to investigate trading activity, request additional information or temporarily delay a withdrawal. A social-media complaint is evidence of a dispute, not evidence of wrongdoing.

Still, the story raises a much more interesting question.

What happens when the company deciding whether to pay your trading profit may also have been the economic counterparty to it?

To answer that, we need to look beyond the trading platform. Spreads, leverage, swaps and execution speed are the visible part of a CFD business. Behind the Buy and Sell buttons can sit very different economic models, and those models can create very different incentives.

The warning everybody has learned to ignore

Anyone who has visited a European CFD provider has seen some version of the same depressing sentence: a large percentage of retail investor accounts lose money when trading CFDs.

It has become such a familiar piece of website furniture that many traders probably no longer notice it. The numbers behind it are nevertheless extraordinary.

When ESMA introduced its major restrictions on retail CFDs, analysis by European national regulators showed that 74% to 89% of retail CFD accounts typically lost money, with average losses ranging from €1,600 to €29,000 per investor. Those findings contributed to the introduction of leverage restrictions, margin close-out rules, negative-balance protection, restrictions on incentives and the familiar provider-specific loss warning.

Poland provides particularly interesting data because the KNF publishes aggregate results for the domestic OTC derivatives market. In 2025, 72.2% of active clients lost money, while only 27.8% made a profit. Losing clients collectively lost approximately PLN 2.68 billion, while profitable clients earned about PLN 740 million.

Those are terrible numbers for traders. At first glance, however, they raise an uncomfortable question: shouldn't they be wonderful numbers for the broker?

The answer is: it depends.

Who is on the other side?

Online discussions often divide brokers into two conveniently simple categories. “Good” brokers supposedly send every order directly to the market. “Bad” brokers supposedly take the other side and wait for their customers to lose.

Real market structure is considerably less dramatic — and considerably more complicated.

A CFD provider can hedge client exposure externally. It can internalise some exposure. It can aggregate positions and hedge the resulting net risk. Different customers or instruments can be handled differently. Banks themselves can act as principal against clients.

Internalisation is not evidence of wrongdoing, just as external hedging is not proof of good behaviour.

But internalisation can create a conflict of interest.

Imagine that a customer buys a gold CFD and the provider retains the opposite economic exposure rather than fully hedging it elsewhere. If gold falls and the customer loses €1,000, the economics can favour the provider. If gold rises and the customer makes €1,000, the economics can move in the opposite direction.

Multiply that relationship across thousands of accounts and the issue becomes obvious: under some business models, client losses can contribute directly to the provider's trading revenue.

That doesn't mean the provider cheats. It means the incentive exists. And incentives matter.

When losing customers become bad news

Here we encounter one of the stranger contradictions of regulated CFD brokerage.

Imagine that 89% of the customers of a European investment firm consistently lose money.

Depending on how the firm manages its exposure, its dealing result might look rather attractive.

Its compliance department may be considerably less enthusiastic.

A very high client loss rate creates questions regulators are specifically interested in. Is the product reaching the correct target market? Do customers understand the leverage involved? Are appropriateness assessments working? Is the product being promoted responsibly? Are customers being encouraged to trade excessively? Are conflicts between the provider and its customers properly identified and managed?

The famous CFD loss warning exists precisely because European regulators regarded those loss rates as evidence of a serious investor-protection problem. ESMA has continued to remind providers of their obligations concerning target markets, appropriateness and conflicts of interest.

This creates an interesting paradox.

What can be profitable for a dealing book can simultaneously be terrible for a regulated institution.

For a supervised financial company, customer losses aren't simply a possible source of revenue. They are also a regulatory statistic.

The boring broker

Consider a rather different example.

Dom Maklerski BOŚ for instance, is a long-established Polish brokerage house belonging to the BOŚ banking group. It offers CFDs and OTC derivatives, but it also provides conventional securities brokerage, access to Polish and foreign markets, investment products and other services within the regulated investment environment.

It does not look much like the stereotypical international retail-FX operation.

And that difference matters.

A diversified brokerage relationship does not necessarily begin and end with leveraged speculation. The same customer can own shares, ETFs or bonds, use retirement investment products, hold other investments and occasionally trade derivatives.

From that perspective, destroying a customer's capital in six months can be surprisingly poor business.

A customer who remains with an institution for twenty years can generate commissions, spreads and other revenues for twenty years. As their wealth grows, their assets and activity may grow too.

The most profitable customer, in other words, doesn't necessarily have to be the one who loses.

It may simply be the one who stays.

There is a price for boring

There is, however, another side to this story — and it shouldn't be hidden.

Open the Market Watch window of a conservative brokerage and an experienced trader accustomed to aggressively priced international CFD providers may not be impressed.

Take gold.

At the time we checked a live DM BOŚ market window, the displayed XAU price showed a spread of roughly a dollar per ounce. Specialist international CFD providers can, under liquid market conditions, quote gold considerably more tightly.

For somebody trading frequently, that difference is significant. Very significant.

The same broader trade-off can appear elsewhere. A specialist broker may offer tighter spreads, more aggressive leverage where regulation permits it, a larger instrument universe, more account configurations, better infrastructure for very active traders or services designed specifically around leveraged trading.

There is a reason specialised brokers exist.

Some are extremely good at what they do.

A regulated bank-owned or traditional brokerage is therefore not automatically the cheapest place to trade, nor necessarily the best choice for a professional or highly active trader.

But this raises another question: What exactly is the customer receiving in exchange for paying more?

A spread is also a business model

The relatively wide gold spread is interesting for another reason.

It shows one perfectly ordinary way a broker can make money from a customer without requiring that customer to lose their account.

The customer trades.

The broker earns a spread or commission.

The customer trades again.

The broker earns again.

If the customer remains active and profitable for ten years, that can be an excellent commercial relationship.

Of course, looking at a spread tells us nothing by itself about how a particular broker manages its market risk. We cannot look at a Market Watch screenshot and conclude whether a position is internally retained, externally hedged or managed dynamically as part of a larger book.

But the broader principle matters.

A broker can make very good money from successful traders. It simply needs an economic model in which their activity, rather than their failure, has value.

That distinction is rarely displayed beside the EUR/USD spread.

Why the loudest broker may need to shout

There is another difference worth considering: customer acquisition.

Parts of the international retail CFD industry have historically been formidable marketing machines. Affiliates, introducing brokers, sponsorships, online advertising, sales teams, influencers and sophisticated performance-marketing funnels can all be used to convert internet traffic into funded trading accounts.

Acquiring those customers can be expensive.

A bank or diversified brokerage institution can begin from somewhere very different. It may already have an established brand, regulated infrastructure, payment relationships and a large population of customers who know the institution.

Its economics therefore do not necessarily require the same constant flow of new leveraged traders.

This doesn't make quiet financial institutions virtuous or heavily advertised brokers suspicious. Marketing expenditure tells us very little about whether an individual firm behaves properly.

But customer acquisition costs influence business models.

If obtaining a new customer is extraordinarily expensive, how long does that customer need to remain profitable to justify acquiring them?

And what does “profitable customer” actually mean to that particular business?

Those are more revealing questions than they initially appear.

Then comes the withdrawal

Which brings us back to the LinkedIn dispute that started this discussion.

A withdrawal being delayed or rejected is not evidence that a broker is dishonest.

Banks freeze transactions. Regulated investment firms conduct AML reviews. Fraud investigations happen. Sanctions screening happens. Source-of-funds questions happen. Customers can breach contractual conditions, and trading patterns can legitimately require investigation.

Regulation does not mean that every withdrawal request must be processed instantly and without question.

The interesting issue is what economic significance does a profitable customer's withdrawal have to the institution processing it?

Imagine a customer makes €10,000 trading gold and withdraws it.

For an institution whose economics depend substantially on long-term customer relationships, paying that legitimate profit does not necessarily represent the failure of the relationship. The customer may still own €100,000 in securities, continue trading and remain with the institution for another decade.

For a provider that retained the customer's trading exposure and therefore suffered economically when that customer made €10,000, the same withdrawal can have a different economic meaning.

That does not mean the second provider will refuse to pay.

It certainly doesn't establish misconduct.

But it does create a conflict that customers should understand — and that regulators expect firms to manage.

Regulation cannot make CFDs safe

There is also a danger in taking this argument too far.

A regulated broker cannot make leveraged speculation safe simply by behaving properly.

Most retail customers can still lose money.

In Poland in 2025, they overwhelmingly did. According to the KNF data, the average losing active client lost approximately PLN 10,046, while the average profitable client earned approximately PLN 7,190. Across the market, customer losses exceeded customer profits by almost PLN 2 billion.

No regulator can eliminate the mathematics of leverage. It cannot stop gold moving against a position. It cannot prevent every investor from making a poor decision.

What regulation can attempt to do is make sure the game is conducted according to rules: leverage is constrained, risks are disclosed, conflicts are managed, customers are assessed appropriately, client protections exist and avenues for complaints and supervision are available.

That is an important distinction.

A fair game can still be a very difficult game.

Perhaps we're comparing the wrong number

Traders love comparing brokers.

Spread.

Commission.

Swap.

Leverage.

Execution speed.

All of those things matter. For an active trader, small differences can accumulate into enormous ones.

But perhaps one question deserves to appear beside them:

How does this company make money from me?

A business that earns primarily when you transact has one set of incentives. A business built around keeping your assets for decades has another. A business that can earn from your trading losses has another.

Many financial institutions combine several of these models simultaneously. None automatically makes a company good or bad.

But understanding the economics behind the platform tells you something that its spread table cannot.

Perhaps that is the lesson hidden inside those increasingly invisible CFD risk warnings.

Before asking only what your broker charges, it may be worth asking what your broker wants.

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