right, was going to let this go, but can't let an idiotic comment go unchecked. So, for the supposed CFA educated (which I think you need to ask for your money back - because this stuff is on page one - in fact it is the stuff they expect you to know before you even register for the course) ... let's take a page out of the investing for dummies text book shall we? (you can get this on Wikipedia or Investopedia if you want to second guess me) Institutions offering CFD's hedge themselves in 2 ways - 1) they offer direct market access, taking a physical position against your CFD position, to my knowledge all South African banks do this OR 2) they act as market maker, taking your order onto their own book and coming up with various hedging strategies, typically netting your order off against a counter short / long trade - or more commonly netting off the portfolio. This is where the IG's of the world fit in, hence Simon (and my) previous comments over the stability of these guys (anyone remember DealStream??). Now, to correct the idiotic comments - they do not (and let me repeat this) do not use delta. Delta is not a thing. Delta is mathematical ratio that compares the price of the underlying to the price of the derivative. In CFD's delta is one (the movement on your margin account as the underlying moves does not fit the definition) . Saying they use Delta is like saying Dale Steyn uses his batting average to deliver an in-swinging yorker.