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eToro IPO highlights why US retail investors cannot trade CFDs
Benzinga explains that CFDs are restricted in the United States because post crisis Dodd Frank rules require CFD trading to be conducted via registered exchanges, while most CFDs trade over the counter elsewhere.
Benzinga notes that when eToro priced its shares at $52 and began trading on the Nasdaq as ETOR in May 2025, a large share of the roughly $620 million offering revenue came from a product most American users cannot access, the contract for difference, or CFD.
A CFD is described as an agreement between a trader and a broker to exchange the difference in an asset's price from when a position is opened to when it is closed, allowing traders to bet on price moves without borrowing shares for traditional shorting.
Benzinga also outlines how CFDs work financially, including that traders typically post only a small margin deposit of around 5% to 10% while gains and losses are calculated on the full position size, and that costs can include the spread and overnight funding charges for positions held past a daily cutoff.
The outlet attributes the US retail restriction to regulatory changes after the 2008 financial crisis, saying the Dodd Frank Wall Street Reform and Consumer Protection Act placed many over the counter derivatives under SEC and CFTC oversight, with US retail access to CFDs limited unless the trade is executed on a registered US exchange, while most CFDs are traded over the counter globally.
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