CFD's is it Credit Forward delivery, I don't think he had paid for them yet ???
Contracts for Difference (CFD) as I understand it is a method of trading speculatively on the price difference without actually taking any ownership of the company in a way that normal shares are traded. You have no voting privileges etc
CFD's usually involve leverage to allow the person to speculate on a larger scale with less money down. When the market runs in your favour it is good, but anything agaist you can lead to quicker margin calls depending on the available capital.
For a company like Forge, I am sure there were a number of players out there that would have some serious money on the line. Hindsight is a beautiful thing and I truly feel sorry for those who invested in the company during their growth period. Up until November, these investors had little to worry out except a slowly declining share price which may have rebounded once the Roy Hill work (and other projects) started. After November though, anyone caught with their hand in the cookie jar considering the red flags got bitten, especially on the quick rebound. Again hindsight is always 20/20 and that is the risk of investing into shares. One day the company is flying along, winning contracts left, right and center, the next they are reporting unforeseen losses and complications and alas we end up where we are.
People can learn from it, but then so many will not. It is the nature of the markets, the creation of the ebs and flows that transfer money from one to another, some win, some lose....
FGE Price at posting:
91.5¢ Sentiment: None Disclosure: Not Held
