Ronaldo backs ‘volatile’ derivatives product for Cyprus-based firm
Cristiano Ronaldo, said to be the world’s most highly paid football player, is lending his name to promoting contracts for difference (CFDs) derivatives, which regulators across Europe have been seeking to clamp down upon due to the high risk of deep losses to retail investors they can entail.
The mercurial Portugal and Real Madrid forward tweeted his 59 million followers last month to say, “Happy with my new partnership with @EXNESS”.
He also retweeted a statement from Exness in which he says:”It’s an honour to partner with an international company that gives back to the world not only in offering the highest quality of services but also in fostering a socially conscious culture.
He adds, “This captures my own personal agenda of being the best I can be on the international football scene and giving back to the community with every opportunity I get.”
CFDs are more or less prohibited in the US, and and in 2014 a judge in the Republic of Ireland described them as a “volatile form of gambling”.
Earlier this year, Forbes published an article in which they identified Ronaldo as the world’s top earning footballer, ahead of Lionel Messi, pictured left, with salary and bonus of US$58m and total earnings of $93m.
The Exness Group is headquartered in Cyprus, and specialises in CFDs. It offers traders, including ‘day traders’ and retail investors, of leverage — borrowed funds — as many as 500 times the account holder’s deposit, stated Donal Griffin in Bloomberg Businessweek.
On a fairly modest punt of £100, if a company moves up half a percentage point an investor will make a notional profit of £50,000 — but were that company to fall back by half a point, the investor would, of course, lose the same amount, a big hit on a modest wager, and one that can cause great hardship to retail investors who don’t understand the markets on which they are effectively betting.
The problem for many, including regulators, is that CFDs make it extremely easy for investors to bet on the direction of movement of a market without actually buying any of the underlying assets.
Ronaldo has proved to be open to business opportunities, trading on his reputation as a footballer in a number of lucrative endorsement and sponsorship deals, and some joint ventures.
He opened a fashion boutique named CR7 (his initials and player number at Real Madrid) on his native island of Madeira, part of Portugal, with a second one in Lisbon.
He has also formed a joint venture with Madeira-based hotel group Pestana to open a small chain of football-themed boutique hotels also branded CR7, in Madeira, Lisbon, Madrid and New York.