Best CFD Brokers

Author: Eduardo Montero

CFDs or Contracts for Difference are financial instruments whose value replicates the performance of a financial asset. By trading CFDs you can trade upwards and downwards on different types of assets: equities, currency pairs, cryptocurrency, commodities, stock indices and others.

To do so, simply access a trading platform, with a CFD broker and open a demo account without depositing.

Broker	Key Features	Offer
Go to XTB	This internationally regulated broker has over 15 years experience and you can trade over 3,000 CFDs in stocks, indices,commodities, currencies and cryptocurrencies. Website: https://www.xtb.com/ Regulated by: FCA, CNMV, FSC Min Deposit: 0 € / $ Trading Platforms: WebTrader + iOS App + Android App Type of Execution: Market Maker / STP Available Instruments: Over 2100: Forex, indices, commodities, stocks, ETFs and cryptocurrencies.	Excellent customer support. VISIT BROKER (*) 77% of retail investors lose money when trading CFDs with this broker.
Go to Pepperstone	CFDs (+800) available on Forex, stocks, indices, commodities and cryptocurrencies. An FCA-regulated broker can provide professional trading platforms and protect your money. Website: https://pepperstone.com/ Regulated by: FCA, CySEC, ASIC, BaFin, DFSA, SCB, CMA Min Deposit: 200 € / $ Trading Platforms: MetaTrader 4 + MetaTrader 5 + cTrader + Trading View Type of Execution: STP / NDD Available Instruments: More than 1200. Specialised in Forex, also offers CFDs on indices, stocks, commodities, cryptocurrencies, ETFs and currency indices.	Low spreads and ultra-fast execution. VISIT BROKER (*) Between 74-89 % of retail investor accounts lose money when trading CFDs.
Go to XM	There are more than 1000 contracts for difference (CFDs), on Forex, commodities, stock indexes, and shares. You also get free training and daily market analysis. Website: https://www.xm.com/ Regulated by: CySEC, ASIC, FSC Min Deposit: 5 € / $ Trading Platforms: MetaTrader 4 + MetaTrader 5 Type of Execution: Market Maker Available Instruments: More than 1000: Wide range of Forex currency pairs. Also commodities, precious metals, indices and stocks.	$30 no deposit bonus and deposit bonus up to $5,000. VISIT BROKER (*) Bonuses not available for clients of the XM Group's European or Australian regulated entity. Check conditions on the broker's website.
Go to IC Markets	More than 1,700 CFDs available on Forex currency pairs, commodities, indices and commodities, US and Australian stocks, bonds, cryptocurrencies and futures. Website: https://www.icmarkets.com/ Regulated by: CySEC, ASIC, FSA Min Deposit: 200 € / $ Trading Platforms: MetaTrader 4 + MetaTrader 5 + cTrader Type of Execution: ECN Available Instruments: More than 2250: More than 60 Forex currency pairs. Also offers commodities, indices, stocks, bonds, cryptocurrencies and futures.	VISIT BROKER
Go to Axi	Axi, a regulated online broker, offers access to more 130 contracts of difference on indices, commodities, metals, and other financial instruments. Website: https://www.axi.com/ Regulated by: FCA, ASIC, DFSA, FSA Min Deposit: 0 € / $ Trading Platforms: MetaTrader 4 Type of Execution: STP / ECN Available Instruments: More than 130 instruments: Forex, indices, commodities and cryptocurrencies.	VISIT BROKER
Go to IQ Option	Trades can be made starting at $1, and you can choose the leverage for each trade. There are over 240 contracts for difference (CFDs) in IQ Option online platform, which allow you to trade either long or short. Website: https://iqoption.com/ Regulated by: -- Min Deposit: 50 € / $ Trading Platforms: Own Platform + iOS App + Android App Type of Execution: Market Maker Available Instruments: Over 250 CFDs: Forex currencies, stocks, cryptocurrencies, commodities and ETFs.	VISIT BROKER
Go to FP Markets	You can trade CFDs (or contracts of difference) with this regulated broker. You can trade long or short. This includes stocks, currencies, metals, stock indices,... Website: https://www.fpmarkets.com/ Regulated by: CySEC, ASIC Min Deposit: 100 € / $ Trading Platforms: MetaTrader 4 + MetaTrader 5 + IRESS + cTrader Type of Execution: ECN Available Instruments: More than 10,000 tradable instruments: Forex, CFDs, indices, stocks, commodities, metals, cryptocurrencies and bonds.	VISIT BROKER
Go to RoboForex	Roboforex has a variety of professional trading platforms and more than 12,000 financial assets like currency pairs and CFDs on stock indices, ETFs, commodities, cryptocurrencies and equities. Website: https://roboforex.com/ Regulated by: FSC Min Deposit: 100 € / $ Trading Platforms: WebTrader + MetaTrader 4 + MetaTrader 5 + cTrader + iOS App + Android App Type of Execution: STP / ECN Available Instruments: Over 12,000: Forex, stock indices, ETFs, commodities, cryptocurrencies and stocks (over 8400 in R Stocks Trader account).	First and subsequent deposit bonus up to $50,000. VISIT BROKER (*) Bonus not available for European clients. Check conditions on the broker's website.
Go to Exness	This broker, which was established in 2008, is regulated and allows you to trade more than 200 CFDs on Forex currencies and stocks, stock indices, cryptocurrencies, metals, and energies. Website: https://www.exness.com/ Regulated by: FCA, CySEC, FSC, FSCA, FSCA, FSC, SDL, CBCS Min Deposit: 0 € / $ Trading Platforms: MetaTrader 4 + MetaTrader 5 Type of Execution: Market Maker / ECN Available Instruments: Over 250 instruments including more than 100 Forex pairs, commodities, energies, stocks, indices and cryptocurrencies.	VISIT BROKER
Go to FBS	FBS broker allows you to trade more than 650 CFDs (on stocks, commodities, currencies and cryptocurrencies). Website: https://www.fbs.com/ Regulated by: CySEC, FSC Min Deposit: 1 € / $ Trading Platforms: MetaTrader 4 + MetaTrader 5 + iOS App + Android App Type of Execution: STP / ECN Available Instruments: Over 650 assets: Forex currencies, cryptocurrencies, precious metals, energies and equities.	100% deposit bonus doubling your deposit. VISIT BROKER (*) Bonuses are not available for European clients. See conditions on the FBS broker's website.
Go to AvaTrade	AvaTrade allows you to trade more than 1,250 CFDs on currency pairs, stocks, commodities and indices. Multiple platforms for manual or automatic trading. Website: https://www.avatrade.com Regulated by: Central Bank of Ireland, ASIC, BVI, FSA, FSCA Min Deposit: 0 € / $ Trading Platforms: WebTrader + MetaTrader 4 + MetaTrader 5 + iOS App + Android App Type of Execution: Market Maker Available Instruments: More than 200. Major, minor and exotic Forex pairs, cryptocurrencies and CFDs on indices, commodities and stocks.	VISIT BROKER
Go to Plus500	Plus500 offers a world-class multilingual platform. You can trade a variety of currencies, cryptos, indices and commodities, stocks, options, and ETFs. Website: https://www.plus500.com/ Regulated by: FCA, CySEC, ASIC, FSA, DFSA, FSCA Min Deposit: 100 € / $ Trading Platforms: WebTrader + iOS App + Android App Type of Execution: Market Maker Available Instruments: Over 2,000 CFDs: indices, currencies, commodities, cryptocurrencies, stocks, options and ETFs.	Free demo account with no time limit. VISIT BROKER (*) CFD Service. Your capital is at risk.
Go to eToro	eToro lets you trade CFDs manually for currencies, cryptocurrencies, stocks, commodities, indices,... You can also use the CopyTrader tool and follow other traders to copy their trades. Website: https://www.etoro.com/ Regulated by: FCA, CySEC, ASIC Min Deposit: 200 € / $ Trading Platforms: WebTrader + iOS App + Android App Type of Execution: Market Maker Available Instruments: Over 3500: Large number of stocks (over 3100) and cryptocurrencies (over 75). Also commodities, currencies, indices and ETFs.	World leader in social trading. VISIT BROKER (*) Warning: 77% of retail CFD accounts lose money.
Go to OANDA	OANDA is a broker with over 25 years experience, offering CFDs on stocks, Forex currencies and commodities. It also offers oil, gold, silver and integrates market analysis tools into its platforms. Website: https://www.oanda.com/ Regulated by: FCA, ASIC, NFA, BVI FSC, IIROC Min Deposit: 0 € / $ Trading Platforms: MetaTrader 4 + MetaTrader 5 Type of Execution: Non Dealing Desk Available Instruments: More than 120: Forex, indices, metals, stocks, commodities and cryptocurrencies.	VISIT BROKER

In this article we will highlight the main advantages of CFDs, the differences with stocks, the financial products they allow you to trade on and the best CFD trading platforms with free demos.

How to choose a CFD Broker

Products and services offered

Dealing with a CFD Broker offering a variety of products and services is important. Many tend to engage in currency related services and ignore all other core and essential assets such as commodities, stock indices and cryptocurrencies. Choose a Broker who can provide you with all the services you need in one trading platform.

The reputation

Always make sure that the Broker is reliable by doing some research on their reputation. Search online for other clients’ opinions and read Broker reviews; this will help you to ascertain if their reputation is genuine. If they have an excellent rating, you can be sure you can count on them. However, you should be careful and avoid scams, there are sites that rank the most reliable  CFD Brokers.

Customer support

There will always be a time when you will need support from the Broker; therefore, you will need to ensure the quality of customer service by contacting customer support even before opening your account. Some of the support services may include a phone call, email or chat.
The best support service is the live chat option as it offers a real-time response. Make sure you choose a Broker who has a good reputation for customer support.

Commissions and spreads

When choosing a Broker, you should be aware of the transaction costs you will be subject to. Every time you trade, you will be asked to pay a spread or commission. Therefore, a wise choice is to look for a Broker with cheaper rates. However, for security reasons, you may need to sacrifice the low transaction costs for a more reliable CFD Broker. It is important to get a good balance between these two factors.

Trading Platforms

Some of the best CFD Brokers offer proprietary trading platforms that are easy to use and full of advanced tools to make this activity faster.
Before choosing a Broker please check which trading platforms they provide. A good broker will do their best to offer you the latest developments in the market, offering their traders easy-to-use charting tools to facilitate trading and all the relevant information you may need to trade correctly. You can also find brokers with MetaTrader 4 or brokers with MetaTrader 5.

Training Tools and Services

The best brokers care about their clients and do everything to help them achieve success. This will include a variety of learning materials, including: articles, courses, video lessons, market analysis, dictionaries, manuals, trading webinars and so on. Their task is to provide you with as much material as possible and your task is to absorb everything to the maximum. If you feel skeptical about the importance of training in trading, it is very likely that you will end up losing everything you have invested

The best CFD Brokers

In this article we have reported the fundamental points for the choice of the CFD Broker that suits your needs. Each Broker has some positive and some negative aspects, depending on your trading style and type of investment, you will need to choose the best CFD Broker for you.

To help you make the right choice, with the help of experts in the field, we have prepared a comparison table of the best CFD Brokers. Each of the indicated brokers offers a free demo account without constraints, the advice is to try personal services and trading platform through the demo account and make the deposit when you are sure of your choice.

CFD: meaning

CFD is an acronym that stands for Contracts for Difference. In fact, they are standardised contracts and are very practical because of this feature, so much so that they can be negotiated with a single click of the mouse.

To trade CFDs you do not need to fill out forms and sign authorisations as you do when buying shares.

Therefore, CFDs are very practical and fast investment tools. But how do they work?

Each CFD replicates the performance of a financial asset, such as a share. If you trade a CFD on an Amazon share, for example, you may open a bullish or bearish position depending on your market forecast.

In CFD trading you can open Long (bullish) as well as Short (bearish) positions.

• When opening a bullish position, the trader buys contracts of type Longwhich allow him to obtain capital gains in proportion to the increases (remember that your capital is at risk and you may incur losses if the price does not move in your favour).
• When opening a bearish position the trader buys contracts of type Shortwhich allow him to obtain capital gains in proportion to the reductions (remember that your capital is at risk and you may incur losses if the price does not move in your favour).

Trading platforms

To trade CFDs you need access to a trading platform. The platforms are provided by online CFD brokers and therefore you must first register, i.e. open a trading account with a broker.

A trading platform allows you to place orders to the broker, which can be of various types: opening and closing of buy or sell positions, stop loss, take profit, operational stop, pre-order and pending orders (sell limit, buy limit, buy stop, sell stop).

Advantages of CFD trading

CFD trading has many advantages, which we could summarize in economy (compared to traditional investment), practicality, convenience, speed.

With CFDs you have the opportunity to trade online from your computer, smartphone or tablet, with virtually no bureaucracy. So with CFDs you are not buried by the bureaucracy that a traditional investment requires.

For example, paper securities should not be held, deposited at the bank and negotiable only upon consultation and request. CFDs can be traded with one click and open positions can be closed out even after a few minutes.

Another great advantage is that with CFD trading you can trade long if you think the price is going to go up or short if you think the price is going to go down. In either case keep in mind that your capital is at risk and you can lose it if the price moves in the opposite direction to your position.

CFDs are very popular throughout the world and are successful in countries such as South Africa, Australia, Malaysia, Saudi Arabia, United Kingdom, Singapore, United Arab Emirates, Indonesia, New Zealand, Japan, Thailand, Qatar, Taiwan, Brazil, Vietnam, Kuwait, Germany, China, Nigeria, Philippines, Bahrain, India, Kenya, Netherlands, Israel, Senegal, Ireland,…

Further benefits are most appreciable by making a direct comparison between CFDs and Shares, which we present below.

How CFD trading works

We have so far seen how you can trade, what are its advantages and what are the best platforms to trade, but how does trading this instrument work technically?

CFD trading takes place between individual investors and the companies offering this service, i.e. brokerage firms or brokers.

As there are no standard contracts for CFDs, each company can determine its own, while adhering to some common points:

• The contract for difference starts when the user (the investor) opens an upward or downward position on a particular instrument and ends when he closes the position on that instrument
• The investor’s gain or loss will be proportional to the price change between the opening and closing of the position
• As compensation for its service, the broker usually applies a spread, i.e. a differential between the purchase and sale price at opening. He can also add commissions for extra services, overnight (overnight financial service fee) and in some rare cases also a management fee if he offers portfolio management
• Once the market closes daily, a position is reinvested and carried over to the following day
• CFDs are “margining” products, which means that the trader or investor user must always maintain the minimum margin level. In the event that the amount of money deposited on the CFD platform falls below the minimum margin level, the broker will make a margin call in which the trader is asked to quickly cover these margins, which otherwise will lead to the closure of positions by the broker, in order to protect himself.

How much you invest with CFDs: the margin

A very important aspect to understand with regard to CFDs is that of margin. We have already mentioned leverage and margining. Below we provide an example so that you can understand how it works in the best possible way.

First, we distinguish between the two types of margin in CFD trading:

• Initial Margin: This is the amount that the user will actually go to invest for trading, and is given by the following initial margin. It is calculated using the ratio of nominal capital to leverage (e.g. if the nominal capital is $3,000 and leverage 1:30, the initial margin will be $100)
• Maintenance Margin: This is the margin required to keep the position open and is returned when the position is closed.

Let’s take an example. Let’s open a position on 1,000€ of the EUR/USD pair, with leverage of 1:30. The initial margin will be (1,000€/30) or 33.33€. Of these, if the holding margin is 50%, €16.76 will be frozen.

They will be returned when the operation is closed. The margin call is important because the equity (a sort of equity that we will talk about in the course) must always remain far enough away from it so as not to come across the margin call, which is a warning that losses have reached alert levels.

Speaking of margins, it must be said that:

1. Once the position is opened changes in share price will affect the available capital
2. When you decide to close the position, you will receive back the margin amounts, net of profit and loss.

Costs, how much does it cost to trade CFDs?

The question of costs can be included among the benefits because as we have seen in detail, CFD trading requires much less money than traditional investment.

Also with regard to the spread, which is what is due to the broker for his service, these are very small percentages and much smaller than the commissions charged by most banks.

CFD brokers instead of earning commissions, they profit from opening positions by applying the spread, so the more positions they open, the more the broker earns.

With CFD trading there is therefore no conflict of interest as the broker does not profit from the trader’s loss but from the quantity of his trades, each of which allows the broker to retain a small percentage that will depend on the type of instrument traded.

Typically, these are the brokers with the lowest spreads.

Differences between shares and CFDs

Ownership of securities

Unlike with equities, there is no ownership of securities to trade with CFDs, so there are not even the many bureaucratic procedures and costs that characterise a traditional equity investment, such as stamp duty or management costs.

Although CFDs are not securities that you physically take possession of, they can be traded quickly and conveniently for short-term profit only.

Expiry date of CFDs

However, most CFDs do not expire, so you are free to keep your position open for as long as you wish, but you will still incur overnight costs which should be refunded to the broker in exchange for keeping your position overnight (3 nights at weekends).

Results in a short time

It is important to point out that CFDs are instruments designed to achieve results in a short time, buying in a market upwards or downwards, in order to profit from upward or downward changes in a stock. Unlike stocks, CFD positions can be closed after just a few minutes with a simple click of the mouse.

Financial leverage

Another big difference between CFDs and shares is in leverage. CFDs are leveraged instruments, so for each individual transaction, the user will not be exposed for the total amount of the value of the traded shares, but only for a smaller percentage.

Finally, it should be noted that CFDs provide access to a wide range of shares, which is not possible through a normal bank. It is possible to create a portfolio of equity CFDs by choosing components from thousands of shares around the world, listed on all major stock markets (European, Asian and American shares).

For example, a 1:20 leverage of 1:20 allows you to trade in shares worth 1000 USD for just 50 USD.

Margin rates and leverage may vary depending on the broker and type of financial instrument used (More info: High leverage brokers).

We will discuss this later in the lesson on CFD leverage.

On which markets can I trade CFDs?

In addition to equities, CFDs allow you to trade upwards and downwards on a variety of financial instruments such as currencies, commodities, ETF funds and indices (check here our comparison of the best brokers for trading indices).

Trading CFDs on Forex

CFDs on Forex allow you to trade on the currency market, then open up or down positions on currency pairs such as Euro Dollar, USD/JPY, EUR/GBP and many others.

The advantages of trading Forex with CFDs include the leverage offered by brokers (around 1:30) and spreads, which are more advantageous than other financial instruments.

A tip: the smaller the spread, i.e. the difference between buying and selling price of the CFD, the cheaper it is to open a position on a financial instrument

Regarding Forex CFD trading it should also be noted that the famous professional trading platform MetaTrader 4 is optimal for this type of financial instrument, although more difficult to use than others.

Cryptocurrency

Cryptocurrency is a new entry in the financial market. They have boomed in recent years and especially with Bitcoin.

With CFDs, by now you will have well understood that you can trade both upwards and downwards, so you can trade both in anticipation of BTC rises and in anticipation of BTC falls.

As the price variations of cryptocurrency are very large, this offers large profit margins. However, there is one flaw: the spread for cryptocurrencies is usually very high and the leverage is very low. In practice, you need much higher capital than other financial instruments and especially than Forex trading.

See our comparison of the best forex brokers here.

Commodities

CFDs on commodities allow trading on oil, gold, silver, copper, natural gas and other types, such as food (soy, coffee, sugar, cotton, etc.).

As the prices of some commodities are very volatile, before trading with real funds we recommend a prior study of the raw material you wish to trade.

ETF

CFDs on ETFs have Exchange Traded Funds as their underlying.

These are particular funds whose shares are traded like shares and are characterised by high liquidity and low management costs.

CFDs allow you to trade them upwards and downwards in a simple way and with a good variety of funds.

Stock market indices

CFDs on indices usually refer to the main stock market indices of the stock markets, such as the Dow Jones, NASDAQ, S&P500, FTSE, or the Frankfurt Stock Exchange, but also to Mid Cap type indices, i.e. those enclosing mid-cap stocks.

Brokers also allow trading on other indices, such as the VIX index, the volatility index, and others.

Options

CFDs on options are a novelty that allows you to open positions on Call and Put options on index and other options.

They are a relatively new and recommended financial instrument for those who start trading.

Browser, app and software trading

To trade CFDs you need software that allows you to access the market and place orders upwards and downwards. These software are commonly called CFD trading platforms and are usually offered free of charge by the brokers you sign up with.

It should be noted that CFD trading is possible both with downloadable software and with dedicated apps, as well as with browser access. Compatible systems depend on the software offered by the broker, so below we will specify which operating systems are compatible with the various platforms mentioned.

Those who do not have a lot of experience and prefer an easy-to-use platform will find very satisfactory some very intuitive software, whose features are easily applicable by all users.

Those who have already gained experience with technical analysis applied to trading will find the use of more professional platforms very satisfying, among which the most famous and used is the MetaTrader 4, as well as how to try it for free in demo mode.

CFD FAQ

This post is also available in Spanish: brokers de cfds, German: beste cfd broker, Malay: broker cfd malaysia, Thai: Thai

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Author: Eduardo Montero

Welcome to Mundo-Forex.com: I'm Eduardo Montero, I work professionally in IT. I started trading in the financial markets (mainly Forex) more than 10 years ago. I'm the author of the articles on this website and of many others published on other websites specialised in stock market investment and finance in general. Learn more about me here: About the author.

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