Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Abnormal Return

When we call something abnormal, we usually mean that it deviates from the norm, or the expected. It can be either negative or positive. The same applies to your financial returns. Let’s say you speculated that a stock would go up by 10%, based on analysis and comparison with other assets. Then, it went up by 24%! The extra 14% is considered the abnormal return. Abnormal returns can move both upward and downward, depending on market conditions.

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