The number of traders turning to contracts for difference has leapt by over 40% on the year to October 2010, highlighting the growing popularity of CFDs amongst individuals and investment funds alike.

The number of traders engaged in CFD trading in the UK has risen to 25,000, up 40% from 18,000 over the course of 2010, according to a study released by Investment Trends.

The Investment Trends research paper, which examined the habits of traders across the UK found that an increasing number had been turning to CFDs as part of their investment strategy, confirming the apparent steady rise in profile for CFDs amongst retail investors nationwide.

The study cited reasons for the growth in CFD trading as the high leverage afforded by margin trading, and the low-cost barriers to entry for traders looking to engage with the CFD markets.

The report highlighted a further 9,000 new traders could be expected to turn to CFDs over the course of 2011, which would complete a significant expansion in the retail CFD market over the last couple of years.

The market for contracts for difference brokers has grown at an equally significant rate, with dozens of new CFD brokers established over the last 12 months in response to growing demand for CFD trading.