From their birth in the early 1990s as a niche product used by investors to avoid stamp duty on UK share trades, “contracts for difference” have become a commonplace way to make leveraged bets on stocks across the globe.
However, the growth of the CFD market has been blamed for making traditional stock markets increasingly volatile. Edmund Shing, an equity strategist at BNP Paribas, says the large quantity of derivatives contracts relative to the underlying shares was amplifying share price moves
Contracts for difference blamed for volatility
FT.com