Hi,
I'm using a demo CFD account and bought a call option on GBP/USD for 56.5. It was my understanding that this is equivalent to the option premium and that, as a buyer, my losses would be limited to this amount. However, I've seen the loss on this trade exceed 56.5 a number of times.
I am clearly misunderstanding something. Is it that CFDs don't replicate this aspect of option contracts?
Thanks very much in advance.