Danish-based Saxo Bank said its trading volumes in contracts for difference, a form of derivative widely used in equity markets, skyrocketed by 292 per cent in January this year from the same month a year ago as markets became more volatile. As investors sought to protect share portfolios without selling their cash equities, they used CFDs to hedge their positions, driving turnover to €6.3 billion ($9.9 billion) in January, according to volumes traded via Saxo. “Faced with the prospect of selling their shares in portfolios built up in the good times, retail investors are increasingly turning to CFDs to hedge against falling prices and to profit from market turbulence,” the bank, which is headquartered in Copenhagen, said in a statement. CFDs are contracts between two parties to pay out a sum based on the difference between the price of a security or index between when the contract is signed and when it closes. CFDs, increasingly used by private investors as well as professionals such as hedge funds, enable investors to profit both when markets fall and rise. In the UK, CFDs are liable for capital gains but are exempt from UK stamp duty.