• This website is NOT meant to defame Fineco Bank institution. This is an online article as an act of journalism that tells a truly happened event in detail and it provides important information about the relative matter. The website's Author is not pursuing for any money out from this article.
• All information you read here about CFD and Fineco Bank CFD is certainly explained on Terms and Conditions of any CFD platform as well; the difference is that this website’s Author expresses that information with a simple and more direct form, differently than meant complicated expressions of financial Terms and Conditions.
• This website is concerning Fineco Bank and its “trading” platform because the Author’s experience happened with that platform, but what is written here may likely concern other trading platforms. The Author has experience only with Fineco Bank platform and other two platforms not mentioned here.
• Due to extension of the topic, only some important details are described here. Other information, like definitions or normative, can be found on the internet.

If you are on CFD, you are not a trader, you are a gambler.

Fineco CFD fishes for your Stop Loss.

Is Fineco CFD a fraud?

Fineco trading platform offers a variety of financial instruments, among them, a simulation software commonly known as CFD (Contract For Differences).
A CFD is a simulation software created by a platform that “clones” a certain Future Contract. Differently than other financial instruments that deal with assets (like Future Contracts), when you open a Fineco CFD position, you do not own any asset. It’s just a simulation created by a platform software.
Other financial instruments that deal with assets have transactions, namely two (or more) counterparts (Traders) that exchange the relative asset for a certain value through a broker. In a CFD there is no transaction. In a CFD, for opening or closing a position, there is not a counterpart, namely there is no trader(s) who buys/sells what you supposedly sell/buy. It’s all a simulation run by a platform software.
Being in CFD is like gambling in an online poker game. That’s why CFD are forbidden in some countries.
Between 80% and 88% of people in CFD end up losing all their money. If you want to be in those who don’t, you should learn a lot about AT, have great money management, belong to a Trader team, and be able to fully control your emotions… and even with that, you may still burn out your account very quickly.
When you open and close a CFD position with Fineco Bank, your pockets get ripped off in many ways: you pay on the Buy-Sell spread, you pay for currency conversion from GBP (or Euro) to US dollars, you pay a percentage for overnight funds on the leveraged margin every 24-hour and, what Traders hate most, you may pay for Automatic Stop Loss position closures imposed by Fineco Bank.

The Stop Loss is a tool that was introduced for reducing the eventual loss in case the market moves in the opposite direction than what the Trader expected: the Trader sets the Stop Loss of a position at a certain value, once reached that value, the Stop Loss closes the position in loss.
Differently, the Fineco CFD Automatic Stop Loss is a tool designed to make you lose your money.
In other financial instruments besides CFD, some Traders do not like using a Stop Loss because anyway with an open position they keep owning an asset and they hope that its value will go back to expected value soon or later.
The Stop Loss should be a free-will tool for the Trader: if the Trader wants to use a Stop Loss, he will set it at a precise value. The Fineco CFD Automatic Stop Loss is assigned to the position and the investor cannot either remove it or change its value.
Any Trader who uses Stop Loss wants to set it to a precise value: either above a resistance or below a support. No Trader wants to set a Stop Loss randomly. Fineco CFD sets its Automatic Stop Loss at half value of the position margin, which is generally NOT set above a resistance nor below a support: that’s why it is so annoying. When the market reaches the Fineco CFD Automatic Stop Loss, you lose 50% of your position money.
Most traders hate Fineco CFD Automatic Stop Loss.

“Real” Stop Loss and Fineco CFD Automatic Stop Loss

Digging deeper there is more: Fineco CFD Automatic Stop Loss is not a real “Stop Loss”.
There is a huge difference between the “real” Stop Loss of an instrument that trades assets and Fineco CFD Automatic Stop Loss.
With a “real” Stop Loss, in order to close your position in Stop Loss, two consecutive events must occur: first the market has to reach the set Stop Loss value to trigger your position for closure, only then your position has to be matched with at least a trading counterpart for its closure. Let’s see that clearer. As definition, the market moves in according to transactions between Traders. Therefore a “real” Stop Loss of an instrument that trades real assets works in this way: let’s suppose that you opened a Long position and you set Stop Loss at $50 value. The market falls and in order to close your position in Stop Loss, first it must happen a transaction at value of $50 (or below $50): such transaction brings the market to $50 (or below $50) and triggers your position for closure; only then, it must happen at least one more transaction at $50 that sells your position. In few words, in order to close your position in Stop Loss at value $50, it must happen at least one transaction at $50 value before your Long position is actually sold.
Fineco CFD Automatic Stop Loss does not work in that way, that’s why it is improper to call it “Stop Loss”. When the relative Future Contract market is moving forward to your Automatic Stop Loss value, your position is just closed in full when the Fineco CFD reaches that value. There is no transaction or further market movement required.

A short summary about why Fineco CFD Automatic Stop Loss should be not called Stop Loss:

• A “real” Stop Loss may be set by the Trader at his will, Fineco CFD Automatic Stop Loss is imposed by Fineco and it cannot be removed,
• A Trader who wants to use a “real” Stop Loss, will set it either above resistance or below support in according to own strategy; while Fineco CFD Automatic Stop Loss is set by Fineco neither above any resistance or below any support, and the trader cannot change such setting.
• A position is closed by a “real” Stop Loss with at least two transactions at (or beyond) the Stop Loss value. With Fineco CFD a position is immediately closed when the relative Future Contract market touches the Fineco CFD Automatic Stop Loss value, no transaction is required… and no transaction exists because it’s all a software simulation.

Therefore Fineco CFD Automatic Stop Loss is NOT a “real” Stop Loss, it’s something else… it is a tool to rip you off.

Officially there is no real fraud in Fineco CFD Automatic Stop Loss, it’s all legal: all is written on the Terms and Conditions that you probably signed off on. The fraud is calling the Fineco CFD Automatic Stop Loss as a “Stop Loss”.

Does Fineco CFD platform fish for Stop Losses? –Yes, it does-.
The main fraud here is that the Fineco CFD software simulation does not perfectly clone its relative Future Contract as it should do. Sometimes some spikes are created (or less often are removed) from the relative Future Contract market in order to close positions in Automatic Stop Loss. Jumping from an Automatic Stop Loss to the next one, Fineco closes positions over positions, ripping off investors’ pockets in a blink of an eye.
Of course the Fineco CFD platform knows your position details and it knows your Stop Loss position: Fineco CFD is a software simulation, you open a position within that software, all details are retained within that software (remember, CFD is not a regulated industry). That software does not disclose your position details to anyone, that is not necessary to make you lose your money. When the market of the relative Future Contract is near your Fineco CFD Automatic Stop Loss value, Fineco CFD deviates a few pips from the Future Contract market value, creating a little spike that does not exist in the relative Future Contract… that spike causes you to lose thousands of dollars. That is exactly what happened to me, read here.

-Yes and No-
Fineco CFD is a legal way to rip off investors.
Nothing is hidden, everything is written on Fineco Bank website, but it is written in a way that is difficult to understand.
If you choose to use an instrument that deals with real assets, you are a Trader: you will trade with real counterparts, you will pay your broker fees for each transaction, you will have regulated rules and precise tools like a “real” Stop Loss if you want to use it.
If you choose to use a CFD instrument, you are a gambler. You will play against a software that sets its own rules, it plays as a virtual counterpart and, in case of fraudulent platforms, it fishes for your so called “stop loss” , which actually are not real “Stop Loss”.

Fineco CFD is a fraud first of all because it calls some tools with misleading name, like the Automatic Stop Loss which is not a Stop Loss and it charges for commissions that bring the investors to believe what is not, as following:

1. Spread on buying-selling price of your position: spread in CFD is pointless, as there is no transaction, namely there is no Buyer or Seller, just you and a software platform. Calling “spread” in CFD misleads the investors to believe that they are trading on asset transactions where there is a counterpart and a broker. Again, that is not the case, therefore the CFD spread should not be called “spread”.

2. Fees for Overnight funds (in case of you keep the position open overnight): you pay a daily percentage for Overnight funds and that is pointless, as you do not have those funds available in your bank account for any other spending at your convenience. Those funds are virtual within the software simulation.

3. Currency Exchange Fee: Fineco Bank offers accounts in Euros, British Pounds, Swiss Francs and US Dollars, all in one bank account. It doesn’t matter whether you have a lot of US Dollars, when you open a Fineco CFD position listed on the US market, such as the Crude Oil WTI, Fineco Bank does not use your US Dollars for the position margin, but takes funds from your main currency account, Euro or Pound Sterling, so you are obliged to pay the currency exchange fee. You pay fees for the currency exchange when you open and close a position, therefore you pay currency exchange fee twice for each position.
First of all, Fineco Bank should use US Dollars funds of the investor, if available, before charging a fee for a currency exchange. Then, since the leverage funds are virtual money (you don’t have them in your current account), Fineco Bank should charge a currency exchange fee only on the US Dollar amount of the gain (or loss) of the position once closed, and not on the entire value of the position. Even if it was necessary to charge a currency exchange fee on the value of the entire position, instead of charging twice, it would be more honest to only charge a single fee once the position is closed, considering the average exchange rate between the position opening time rate and the position closing time rate.

4. All the time your position ends up to an Automatic “Stop Loss” (or a missed Take Profit) due to an artificial spike: the CFD software simulation diverts from the relative Future Contract market value exactly when it decides to fish a “Stop Loss” or miss a Take Profit. See my experience.

When you sign Terms&Conditions with a CFD platform , you agree with all its rules.
You put real money into a software simulation that actually you don’t really know how it works.
That software is like a blackbox, against any principle of transparency, and with misleading labels like “spread”, “stop loss”, and so on. When cases like mine occur, there is no Authority to appeal for justice as CFD is not a regulated industry.

Do not gamble, stay away from CFD.
Everybody knows what gambling is and most people stay away from gambling. CFD platforms are called “trading platform” but as we have seen here, they are “gambling platform”. Do not let them deceive you!
Then, among CFD gambling platforms, there are fraudulent CFD gambling platforms, where non-real Stop Loss are imposed and then eventually fished.
Do not gamble, stay away from CFD. Stay away from Fineco CFD

First of all, bear in mind an aspect: when you close a large position with an instrument that trades assets, your position is usually split in smaller parts in order to match requests of counterparts (other traders); it’s a rare event that a large position is closed with only one counterpart.

On 8th of May 2020, I opened the largest possible Long position of Fineco CFD CLM0SKCFD Jun20 Crude Oil WTI at $24.559 (5 units equivalent 5000 barrels). The Fineco CFD Automatic Stop Loss imposed was set at $23.331. See following picture.