-
Richard Berry
- Updated
CFD (Contracts For Difference) is a high risk over-the-counter (OTC) type of trading. It lets you speculate on the price of underlying financial markets without actually owning the asset by either taking a long (buy) or short (sell) position.
Good Money Guide has extensively tested and shortlisted the best CFD brokers – all regulated in the UK by the FCA.
The UK’s Best CFD Brokers Compared
| CFD Broker | Markets Available | Minimum Deposit | GMG Rating | More Info | Risk Warning |
|---|---|---|---|---|---|
 | 12,000 | £100 | See Platform | 69% of retail investor accounts lose money when trading CFDs with this provider | |
 | 1,200 | £1 | See Platform | 75.3% of retail investor accounts lose money when trading CFDs with this provider | |
 | 10,000 | £1 | See Platform | 64% of retail investor accounts lose money when trading CFDs with this provider | |
 | 2,000 | £100 | See Platform | 80% of retail investor accounts lose money when trading CFDs with this provider. | |
 | 17,000 | £250 | See Platform | 69% of retail investor accounts lose money when trading CFDs and spread bets with this provider. | |
 | 9,000 | £1 | See Platform | 65% of retail investor accounts lose money when trading CFDs with this provider | |
 | 2,976 | $50 | See Platform | 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money | |
 | 7,000 | £1 | See Platform | 60% of retail investor accounts lose money when trading CFDs with this provider | |
 | 12,000 | £1 | See Platform | 68% of retail investor accounts lose money when trading CFDs with this provider | |
 | 5,000 | £1 | See Platform | 74% of retail investor accounts lose money when trading CFDs with this provider. | |
 | 2,100 | £1 | See Platform | 75% of retail investor accounts lose money when trading CFDs with this provider | |
 | 3,981 | £10 | See Platform | 66.95% of retail investor accounts lose money when trading CFDs with this provider |
Our picks of the Best CFD Trading Platforms Reviewed
❓Good Money Guide Shortlisted Our Featured CFD Brokers Based On:
- Over 30,000 votes and reviews in the annual Good Money Guide awards
- Our team’s experiences testing the CFD trading platforms with real money
- In-depth comparison of the features that make these CFD brokers the best
- Exclusive interviews with the CFD brokers CEOs and senior management
- Find out more about our review process in the How We Test Providers page.
Summary:
- City Index: Best CFD Broker For Trading Signals & Post-Trade Analysis
- Pepperstone: Best Broker For Trading CFDs On MT4 & MT5
- Spreadex: Best CFD Broker For CFD Trading With Personal Service
- Plus500: Global CFD Trading on Major Markets
- IG: Best CFD Trading Platform For Liquidity & Market Range
- Saxo Markets: Best CFD Broker For Professional Traders
- Interactive Brokers: Best CFD Trading Platform For Advanced Order Execution
- CMC Markets: Best CFD Broker For Sentiment Trading Tools
- XTB: Excellent CFD Trading Educational Material
- eToro: Best CFD Broker For Controlling Your CFD Leverage
City Index: Best CFD Broker For Trading Signals & Post-Trade Analysis
🏆Award Winner🏆
- CFD markets available: 12,000
- Minimum deposit: £100
- Equity overnight financing: 2.5% +/- SONIA
- CFD pricing: Shares 0.08%, FTSE 1, GBPUSD 0.9
69% of retail investor accounts lose money when trading CFDs with this provider
City Index offers CFD trading on over 13,500 markets including 40 equity indices, 4,700 international shares, ETFs, 19 commodities, 183 forex pairs, government bonds and interest rates giving it one of the largest market ranges of all the major CFD brokers.
Overall, City Index is a good CFD trading platform for traders who want trading signals and post-trade analytics.
Charges and commissions are included in the spread for CFD trading and are very competitive including 0.5 pips for EURUSD, 1 point spreads on the FTSE (UK100 CFDs), 0.8% on UK shares and 1.8 cents per share on USD stocks (2 cents per share being industry standard).
Whilst I was testing City Index’s CFD trading platform for this review there were a few things that make them stand out. Firstly they offer proprietory trading signals on CFDs through SMART Signals. These signals have been developed in-house and enable trades to quickly see upcoming trading opportunities. Signals are ranked based on how successful the type of signal has been in the past for specific assets and you can see the assets signal historic P&L performance based on the pre-determined stop and limit levels.
Performance Analytics is another tool that can help traders improve their CFD profitability. Performance Analytics looks at your CFD trading history and shows you where you do well and when you do not. The idea is to make you a better trader by encouraging you to stick to a trading plan and gives you guidance on when your plan is working and what markets, times and conditions suit your trading style the most.
As well as offering a CFD trading platform and mobile app City Index has always catered to, and still does, to high-value traders over the phone. It is one thing that makes them different from the majority of trading platforms in that you can actually talk to an experienced dealer who knows your account as well as deal electronically.
For new traders, there is a huge amount of educational and informational content from “how-to” videos and articles to more lighthearted CFD, and focussed programming like the Traders Academy.
City Index offers one of the best CFD trading platforms, on a wide range of markets with low costs and is suitable for large traders who want personal service and new traders how need assistance looking for trading ideas.
City Index CFD Trading Platform
City Index Review
Name: City Index
Description: City Index is one of the oldest spread betting and CFD brokers based in the UK. They were founded in 1983 and offer trading in over 13,500 financial markets, to around 126,000 active clients. City Index is currently owned by StoneX, a US brokerage listed on the NASDAQ valued at $1.75bn.
69% of retail investor accounts lose money when trading CFDs with this provider
Why we like them:
City Index offers some of the best trading tools and analysis to help traders perform better. Their unique post-trade analytics and voice brokerage service make it an excellent choice for large and frequent traders.
Pros
- Excellent trading tools
- Post-trade analytics
- Publically listed (part of StoneX)
Cons
- Trading only, no investment account
- Limited options markets
- No direct market access
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Pricing
(4)
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Market Access
(4.5)
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Online Platform
(4)
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Customer Service
(4.5)
-
Research & Analysis
(4.5)
Overall
4.3Pepperstone: Best Broker For Trading CFDs On MT4 & MT5
- CFD markets available: 1,200
- Minimum deposit: £1
- Equity overnight financing: 2.5% +/- SONIA
- CFD pricing: Shares 0.1%, FTSE 1, GBPUSD 0.9
75.3% of retail investor accounts lose money when trading CFDs with this provider
Pepperstone offers CFD traders TradingView as well as two platforms cTrader and MT4 (or 5) which are suited to two different types of traders. cTrader for a more traditional look and click trader and MT4 for automated trading strategies.
Overall, Pepperstone offers one of the best MT4 CFD trading packages and is suitable for those wanting to trade the major markets on tight spreads.
I found when testing that Pepperstone’s main proposition is pricing through, either through MT4 or cTrader CFD traders do get some of the most competitive spreads through Pepperstone.
MT4 is a very good trading platform for automated trading strategies and Pepperstone has a suite of exclusive indicators and trading tools for their CFD traders.
cTrader, is more of a traditional trading platform for trading from charts and sentiment indicators. For chartists, you can also trade CFDs through TradingView with Pepperstone.
Pepperstone has a relatively limited range of CFD markets on offer with 1200 in total including 100 FX pairs, 28 commodities, 28 indices and 900+ UK, US and international shares. The list of shares is growing though and Pepeprstone say that if you want to trade CFDs on a stock that is not listed on it’s platform they will add it on request if there is enough volume and liquidity.
Pepperstone CFD Trading Platform
Pepperstone Review
Name: Pepperstone
Description: Pepperstone were founded in 2010 in Australia and have since then grown to be a global brokerage with international offices and around 400,000 active clients. They offer spread betting and CFDs on 1,200 major market instruments, which means they focus on the most heavily traded assets, mainly forex and indices trading. Of those 900 are shares on the major stocks on international exchanges.
75.6% of retail investor accounts lose money when trading CFDs with this provider.
Why we like them
Pepperstone is a good choice for traders that want to automate their trading strategies through MT4. As far as MT4 brokers they are one of the biggest and best and offers so good EA packages.
Pros
- Tight pricing
- Wide range of MT4 markets
- Pre-built MT4 indicator packages
Cons
- Limited market access
- Only third-party platforms
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Pricing
(5)
-
Market Access
(3.5)
-
Online Platform
(4)
-
Customer Service
(4)
-
Research & Analysis
(4)
Overall
4.1Spreadex: Best CFD Broker For CFD Trading With Personal Service
- CFD markets available: 10,000
- Minimum deposit: £1
- Equity overnight financing: 3% +/- SONIA
- CFD pricing: Shares 0.2%, FTSE 1, GBPUSD 0.9
72% of retail investor accounts lose money when trading CFDs with this provider
Spreadex is a smaller CFD broker that offers trading on a relatively large amount of markets, 10,000 including lots of smaller UK shares. I’ve used them for about 10 years and know some of the staff well.
Overall Spreadex is a good CFD broker for traders that want to trade on major and minor shares and put more of a focus on customer service than technology.
Spreadex has been providing trading since 1999, but only recently introduced CFD trading in 2017. The trading platform, whilst quite basic, does represent what Spreadex is good at, which is the major markets and customer service. Being a smaller CFD broker they have a bank of experienced dealers who can work orders for you and provide support for the CFD app and platform.
Recently Spreadex has become much more competently priced, offering UKX CFD trading with 1 pips spreads, 0.6 pips on EURUSD and 0.2% on UK shares. There is no minimum deposit and no inactivity fee.
Spreadex CFD Trading Platform
Spreadex Review
Name: Spreadex
Description: Spreadex is a financial spread betting broker that has been in operation since 1999. It was founded by ex-city trader Jonathan Hufford and unlike many of its peers, it is not based in London, but instead is headquartered in St Albans Hertfordshire. Spreadex offers both financial spread betting and CFD trading from the same account. The company has some 60,000 account holders and offers access to more than 10,000 financial instruments, including UK small-cap shares, where it is something of a specialist.
64% of retail investor accounts lose money when trading CFDs with this provider
Is Spreadex a good broker?
Spreadex is one of the most established spread betting brokers. They focus on providing excellent customer service through experienced dealers and a trading platform built from scratch in-house. A good choice for those that like to spread bet.
Pros
- Spread betting & CFDs
- Smaller cap stock trading
- Great customer service
Cons
- Not publically listed
-
Pricing
(4.5)
-
Market Access
(4.5)
-
Online Platform
(4)
-
Customer Service
(5)
-
Research & Analysis
(4)
Overall
4.4Plus500: Global CFD Trading on Major Markets
👍Featured👍
- Markets available: 2,000
- Minimum deposit: £100
- Account types: CFDs
80% of retail investor accounts lose money when trading CFDs with this provider.
Plus500 Review
Name: Plus500
Description: Plus500 is an online trading company that operates in more than 50 countries worldwide. Founded in 2008, it has more than 26 million customers today.
Plus500 is headquartered in Israel, however, it’s listed in the UK on the London Stock Exchange (it’s a member of the FTSE 250 index). Here in Britain, its platform is operated by Plus500UK Ltd, which has offices in London.
In the UK, you can only trade CFDs with Plus500. CFDs are financial instruments that allow you to profit from the price movements of a security without owning the underlying security itself.
80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Is Plus500 a good broker?
Overall, Plus500 is a good online trading platform for traders who do not want to do anything more complicated than buy and sell CFDs. The broker does provide sentiment indicators and are quite transparent with costs and fees. In summary:
- Plus500 is a trading platform that offers CFDs.
- You can trade a range of assets on Plus500 including stocks, indices, and currencies.
- There are no commissions when placing a CFD trade on the Plus500 platform but there are some other fees to be aware of.
- The platform offers a range of features including a demo account, alerts, market news, and an economic calendar.
- There are platforms that offer more markets than Plus500.
Pros
- With Plus500, you can trade CFDs on a range of assets including shares, currencies, indices, and ETFs.
- There are no commissions when placing a CFD trade on Plus500’s platform.
- Plus500 offers a range of features to help traders navigate the markets and capitalise on opportunities including charting tools, alerts, an economic calendar, and market news.
Cons
- Other platforms offer more markets than Plus500.
- You can only trade CFDs on the platform (you can’t invest in stocks directly).
- You can’t contact the company by telephone if you require support.
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Pricing
(4.5)
-
Market Access
(4.5)
-
Online Platform
(4)
-
Customer Service
(4)
-
Research & Analysis
(4)
Overall
4.2IG: Best CFD Trading Platform For Liquidity & Market Range
- CFD markets available: 17,000
- Minimum deposit: £250
- Equity overnight financing: 2.5% +/- SONIA
- CFD pricing: Shares 0.1%, FTSE 1, GBPUSD 0.6
69% of retail investor accounts lose money when trading CFDs and spread bets with this provider.
IG Index (as they were then called) was one of the originators of retail CFD trading and offers access to the widest range of markets with the best liquidity. I’ve used them for over 20 years and regularly test the platform. In fact, CFD liquidity on major instruments is often better with IG than the underlying exchanges does to IG’s symmetrical hedging policy and order flow.
CFD costs are included in the spread for retail traders, but you also have the option of trading with direct market access (DMA) on level-2 prices. This enables CFD traders to place orders within the bid/offer spread and get better prices. The commission is then charged post-trade. DMA CFD trading is often must more cost-effective for high-volume larger traders as fills are quicker and at better prices.
You can trade over 17,000 CFD markets with IG including 51 forex pairs, 38 commodities, 34 indices and over 10,000 stocks. You can also trade CFDs on IPO through their grey market. The CFD trading platform is constantly evolving due to customer feedback and IG has a wide range of news, sentiment and analysis that is based on the analytics from the platform on what traders are trading. So for example, if there is a lot of order flow around a particular stock or market, research is created to help traders better understand market moves.
The main thing though that makes IG stand out is it’s size and coverage. As a public company valued at over £3.5bn April 2022) they cater for new, experienced, professional as well as institutional CFD traders.
Overall, IG offers one of the best CFD trading platforms around and provides excellent educational guides and market access for every sort of trader.
IG CFD Trading Platform
IG Review
Name: IG
Description: Founded in 1974 as Investors Gold Index, then IG Index, now just “IG” is one of the world’s largest margin trading brokers. IG offer CFDs, FX and Spread Betting (in the UK) alongside share trading and prime brokerage to over 313,000 active clients and offers 17,000 tradable markets. IG also recently introduced physical share dealing and smart portfolios for longer-term investors.
69% of retail investor accounts lose money when trading CFDs and spread bets with this provider.
Is IG a good trading platform?
Yes, IG provides an excellent all-round trading and investing brokerage service. IG pioneered online trading and financial spread betting for private clients and remains not only one of the largest online trading platforms, but also one of the best. IG stands out through deep liquidity, high market range and excellent added value such as trading tools and analysis.
Pros
- Vast range of markets
- Excellent liquidity & DMA equities
- Listed on the London Stock Exchange
Cons
- Customer service can be slow
- No DMA futures trading
- Still charges inactivity fee
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Pricing
(4.5)
-
Market Access
(5)
-
Online Platform
(5)
-
Customer Service
(4)
-
Research & Analysis
(5)
Overall
4.7Saxo Markets: Best CFD Broker For Professional Traders
- CFD markets available: 9,000
- Minimum deposit: £1
- Equity overnight financing: 2.5% +/- SAXO RATE
- CFD pricing: Shares 0.05%, FTSE 1, GBPUSD 0.7
70% of retail investor accounts lose money when trading CFDs with this provider
Saxo won “best CFD broker” in our 2023 awards as they offer a huge range of markets, with direct market access. This is backed up by robust technology, experienced dealers and a well-capitalised company. Use our comparison table of what we think are the best CFD brokers to compare how many markets they offer, how much it costs to trade major instruments, minimum deposit amounts and what the overnight financing costs are for holding longer-term CFD positions.
Overall, Saxo Markets is the best CFD trading platform suitable for traders with experience who need access to a wide range of markets and order types.
When I tested the CFD platform with Saxo Markets, I traded CFDs and a few options. But, what makes Saxo Markets different though is how you can trade CFDs compared to other brokers. You can trade CFDs with direct market access (DMA) through the main trading platform or app. This means you can place OTC CFD orders directly on the exchange order book, getting better fills and better prices. You can also trade options as a CFD.
Saxo Markets is more of a professional CFD trading platform, so best suited to CFD traders who are graduating from a simple trading platform to something with more order types and support for higher-volume and sophisticated traders. The CFD trading platform is backed up with excellent support from personal dealers and experienced back-office staff, who cater for individual traders, professionals, and institutions like hedge funds and banks.
There is a huge amount of research data and analysis available on the trading platform that can help traders seek out trading opportunities and some very good post-trade analytics that will show you where you trade profitably and which markets you lose in, and therefore can potentially avoid.
Saxo CFD Trading Platform
Saxo Review
Name: Saxo
Description: Saxo is one of the largest CFD brokers worldwide and provides direct market access to equities, bonds, forex, futures and options as well as being a major liquidity and infrastructure provider to wealth managers, banks and smaller brokers.
65% of retail investor accounts lose money when trading CFDs with this provider
Is Saxo Markets a good broker?
Yes, Saxo is a good choice for more sophisticated traders. The platform, analysis, and direct market access may be too complicated for beginners. But, for experienced traders its coverage, commissions and research are unrivalled.
Pros
- Direct market access
- Low commissions
- Robust trading platform
Cons
- Seen as a trading platform for professionals
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Pricing
(4.5)
-
Market Access
(4.5)
-
Online Platform
(5)
-
Customer Service
(4.5)
-
Research & Analysis
(4.5)
Overall
4.6Interactive Brokers: Best CFD Trading Platform For Advanced Order Execution
- CFD markets available: 7,000
- Minimum deposit: £2,000
- Equity overnight financing: 1.5% +/- SONIA
- CFD pricing: Shares 0.02%, FTSE 0.005%, GBPUSD 0.0008%
60% of retail investor accounts lose money when trading CFDs with this provider
IBKR offers CFD trading on around 5,200 markets including 100 forex pairs, 20 commodities, 13 indices, and thousands of international stocks. I’ve traded through IBKR a fair bit and there is no doubt that Interactive Brokers CFD offering is one of the best around.
Whilst Interactive Brokers does not offer the most CFD markets, they do offer one of the best ways to trade them. With IBKR CFDs you can trade with direct market access (DMA) on the exchange so you can place your orders directly on the order book at better prices than the bid/offer. The commission is charged post-trade so you get clean prices with no mark-up and IBKRs commission rates (added post trade) are the best around. Commission on UK stocks is 0.02% and 0.003% on US stocks.
In reality, CFD brokers with the most markets are those that offer access to small or illiquid stocks which are probably not suitable for CFD trading anyway. But, IBKR offers access to the majority of stocks and markets most traders could need.
You can also trade CFDs with the most types of order execution with IBKR, for instance, VWAP, pairs trading, time and price-sensitive order entry. These tools are most suited to professional and very high-volume traders, or hedge funds that are working very large orders and don’t want to scare the market. Most retail CFD traders will have no need for them, but it is representative of IBKRs overall service in that it provides an exceptional institutional-grade CFD platform to retail clients.
Overall, Interactive Brokers is one of the best CFD brokers, most appropriate for experienced and sophisticated CFD traders. But it also has lighter versions of it’s platforms for newer traders that may want to stick with one platform as they become more experienced.
Interactive Brokers CFD Trading Platform
Interactive Brokers Review
Name: Interactive Brokers
Description: Interactive Brokers is a major US online automated electronic broker company. The financial broker is listed on the Nasdaq Exchange with ticker IBKR. The firm operates in 150 electronic exchanges in 34 countries, and offers trading in 28 currencies. Interactive Brokers has more than 3.19 million institutional and retail customers.
Why we like them
Interactive Brokers is an exceptional trading platform that offers institutional-grade trading capabilities to private clients around the world. IBKR has some of the lowest trading and investing fees and the widest market range in the industry.
Pros
- Very low dealing fees
- Wide market range
- Direct market access
- Complex order types
Cons
- Customer services can be slow
- No financial spread betting
-
Pricing
(5)
-
Market Access
(5)
-
Apps & Platform
(5)
-
Customer Service
(4)
-
Research & Analysis
(5)
Overall
4.8CMC Markets: Best CFD Broker For Sentiment Trading Tools
- CFD markets available: 12,000
- Minimum deposit: £1
- Equity overnight financing: 2.9% +/- SONIA
- CFD pricing: Shares 0.1%, FTSE 1, GBPUSD 0.59
74% of retail investor accounts lose money when trading CFDs with this provider
CMC Markets is one of the original CFD brokers launched in 1989. They offer access to over 12,000 markets and are known for tight pricing and good trading platform tech.
One of the main features I like when trading through their platforms that makes CMC Markets stand out is how they present their CFD client sentiment indicators. Most brokers provide sentiment indicators based on what their clients are trading, but CMC enables CFD traders to break down what long and short positions their clients have by time frame and profitability. So you can filter in more profitable traders or longer-term positions.
CMC charges a bid-offer spread on CFDs on indices, commodities, FX and interest rates etc but charges a commission on CFDs over individual stocks and ETFs. Commissions start at 0.10% of the notional value of the trade for UK and European stocks, and at 2 cents per share for CFDs over US equities. Spreads vary by product and contract but are competitively priced relative to peers such as IG and Saxo Markets.
There are some excellent other features as well like thematic indices, share baskets, a wide range of order types, and the ability to enter, work and move orders direct from the charts.
Overall, CMC Markets is an excellent CFD trading platform with good market coverage and very competitive pricing. It’s most suited to short-term CFD traders speculating on the major markets.
CMC Markets CFD Trading Platform
CMC Markets Review
Name: CMC Markets
Description: CMC Markets is one of the original spread betting and CFD brokers based in the UK. They have been providing forex trading services since 1989 and are now listed on the London Stock Exchange. The broker has over 300,000 active clients trading online and is operated from 13 global offices, with headquarters in The City of London.
68% of retail investor accounts lose money when trading CFDs with this provider
Is CMC Markets legit?
Yes, CMC Markets has always offered, and still does one of the best trading platforms for high-frequency and active traders. It’s a good choice for those who want to trade on tight spreads, with a platform built on exceptional tech.
Pros
- Excellent trading platform
- Good liquidity
- Unique sentiment tools
Cons
- Trading only, no investing account
- Limited smaller cap stocks
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Pricing
(5)
-
Market Access
(4)
-
Online Platform
(5)
-
Customer Service
(4)
-
Research & Analysis
(5)
Overall
4.6XTB: Excellent CFD Trading Educational Material
- CFD markets available: 2,100
- Minimum deposit: £1
- Equity overnight financing: -0.02341% / -0.00159% DAILY
- Pricing: Shares 0.3%, FTSE 1.7, GBPUSD 1.4
81% of retail investor accounts lose money when trading CFDs with this provider
XTB’s CFD trading platform offers access to a well voer 2,000 CFD markets including 57 forex pairs, 22 commodities and 25 indices as well as UK, US and international stocks.
When I tested XTBs CFD brokerage I found what sets them apart is some of the platform features.
There are also some nice close-off features, so you can close all your CFD positions in one go, or if you want to cut your losses, just close the losers, or if you want to lock in profits you can just close your winning trades.
There is a lot of educational content on how to trade from various independent “experts” such as Tom Hougaard, Lee Stanford. As well as different courses on how to understand specific aspects of trading like technical analysis and trading psychology.
You also have a comprehensive suite of CFD trader tools like constantly updating market analysis including stock screeners, heatmaps and ETF scanners to help you pick out new trades. There is also an integrated news feed and economic calendar so you can check for upcoming events or news flow that may affect your open positions.
Overall, XTB, is a well-established CFD trading platform with some nice added value that is suitable for most traders.
XTB CFD Trading Platform
XTB Review
Name: XTB
Description: XTB is a CFD and forex broker headquartered in Poland and listed on the Warsaw Stock Exchange (WSE:XTB) valued at over $1bn. XTB was founded in 2003 and offers forex, indices, commodities, ETF and stock CFD trading. XTB has historically used celebrity endorsements to promote it’s brand including Jose Mourinho, Conor McGregor, Joanna Jędrzejczyk and Jiří Procházka.
75% of retail investor accounts lose money when trading CFDs with this provider
Summary
XTB, are a decent all-round trading platform and a good choice for most small-to-medium sized CFD traders. They are publically listed in Poland and offer, competitive spreads on a fairly wide range of markets.
The key things to focus on when considering trading with XTB are:
- They have their own proprietary trading platform. When I interviewed Omar Arnaout, the XTB CEO Omar Arnout, he said “I’m really proud of our platform and honestly believe it’s one of the best in the market.” Rightly so.
- They really push client education, XTB won “Best Trading Platform Education” in our 2023 awards (although they didn’t show up to collect the trophy, they never do). You can read their Q&A on forex education here.
- Customer service is paramount. Omar said that “first and foremost is the customer service”. I really agree with this as I think it’s important to have a few different trading accounts (diversify, diversify, diversify) and you’ll trade more with the broker that treats you best.
Pros
- Publically listed
- Mulitple platform choices
- Innovative order types
Cons
- Not UK based
- No DMA
-
Pricing
(4)
-
Market Access
(4)
-
Online Platform
(4)
-
Customer Service
(4)
-
Research & Analysis
(4)
Overall
4eToro: Best CFD Broker For Controlling Your CFD Leverage
- CFD markets available: 2,976
- Minimum deposit: $50
- Equity overnight financing: 6.4% +/- SONIA
- CFD pricing: Shares 0.15%, FTSE 1.5, GBPUSD 2
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
eToro lets you trade CFDs on major indices, forex pairs and stocks. One advantage of trading CFDs with eToro is that you can set your own leverage and reduce the amount of risk you take on per trade. A good option for new traders who want to see what other investors are trading through their social trading feature.
eToro CFD Trading Platform
eToro Review
Name: eToro
Description: eToro is a social trading platform that lets their users share new and existing CFD positions and their investment portfolios. eToro was founded in 2007 in Tel Aviv, Isreal and has grown to offer investing and trading on 3,000 global assets (including real cryptocurrencies) to 30 millions users worldwide.
51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money
Is eToro a good broker?
Yes, eToro does have its flaws for experienced investors, but if you are just getting started eToro is a great introduction to financial markets. eToro is actually a very innovative trading platform offering copy trading, social networking and unleveraged CFDs.
Pros
- Really simple to use
- Social and copy-trading
- Set your own leverage
- Pre-built sector portfolios
Cons
- Can only trade and invest in USD
- No SIPPs or ISA
- No direct market access
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Pricing
(4)
-
Market Access
(4)
-
Online Platform
(4.5)
-
Customer Service
(4)
-
Research & Analysis
(4.5)
Overall
4.2What Is A CFD Broker?
A CFD broker offer contracts-for-difference via trading platforms so that their clients can speculate on the price of a financial market or asset going either up or down with leverage.
CFD brokers have been around for decades, and were originally used by institutional and professional investors to hedge portfolio exposure or build up large positions in listed equities anonymously.
However, over the years, as retail investors have become more sophisticated, private clients are able to trade CFDs on global markets.
Should You Trade With A CFD Broker?
CFD brokers offer a higher risk form of trading, so contracts for difference are not suitable for everyone. Here is a round-up of the advantages and disadvantages of using a CFD trading platform:
Pros
- Potential for high returns: Financial markets can be volatile, meaning that prices can rise and fall quickly. That creates opportunities for high returns if you are able to make accurate predictions about the direction of the markets
- Access to a wide range of assets: Many brokers offer access to more than 10,000 trading instruments so you should always be able to find trading opportunities
- Liquidity: The financial markets can be very liquid, meaning that there are usually always buyers and sellers. That liquidity makes it easier to quickly trade in and out of your positions, so you can move quickly and take advantage of trading opportunities as you spot them
Cons
- High risk: The financial markets are risky, and there is always the potential to lose money. This is especially true if you are not experienced in trading, or if you make bad decisions and are led by your emotions
- Volatility: The financial markets can be volatile, prices in them can fluctuate very quickly and sometimes randomly. This can make it difficult to make accurate predictions about the direction of the market and that can mean trading losses
- Fees: There are fees associated with trading in the financial markets, such as commissions and spreads. These fees can eat into your profits and your capital, so it is important to understand what these fees are and to factor them into your trading decisions
Industry experts told us...
"CFDs, provide one of the most versatile ways to take a position on financial markets going up or down. They are an essential product for any trader who is either hedging a long-term portfolio or for short-term higher-risk speculation."
What Is The Best CFD Trading Platform For Beginners?
City Index is one of the best CFD trading platforms for beginners as they offer trading signals, lots of analysis and educational materials. They also have a feature call Performance Analytics that analyses your trading and tells you where you are more successful and which markets you should avoid based on your trading style.
| Beginner Features: |  | | |  |  |  |  |  |  |
|---|---|---|---|---|---|---|---|---|---|
| Trading Signals | ✔️ | ✔️ | ❌ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ❌ |
| Webinars | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
| Seminars | ✔️ | ❌ | ✔️ | ❌ | ❌ | ✔️ | ✔️ | ✔️ | ❌ |
| Leverage Control | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ❌ | ✔️ |
| Low-Risk Products | ❌ | ✔️ | ❌ | ❌ | ❌ | ✔️ | ✔️ | ❌ | ✔️ |
| Investment Account | ❌ | ✔️ | ❌ | ❌ | ❌ | ✔️ | ✔️ | ❌ | ✔️ |
It is important to note though that CFD trading is a high risk form of investment and if you are completely new to investing it is not suitable to start trading CFDs. It is less risky to invest through tax-efficient stocks and shares ISAs.
⚠️ All CFD Brokers Good Money Guide Recommends Are FCA Regulated
The FCA is the Financial Conduct Authority and is responsible for ensuring that UK CFD trading platforms are properly capitalised, treat customers fairly and have sufficient compliance systems in place. We only feature CFD platforms that are regulated by the FCA, where your funds are protected by the FSCS (Financial Services Compensation Scheme).
Which CFD Broker Is Best For Advanced & Professional Traders?
Saxo Markets is one of the best brokers for professional CFD trading, predominantly because their client base is generally more sophisticated than other CFD brokers. As such, their trading platform has been designed with professional traders in mind with DMA access, physical trading on a robust, institutional-grade platform.
Likewise, IG and Interactive Brokers (IBKR) both offer DMA trading and physical investing.
Whilst both IG and IBKR both offer institutional trading for hedge funds and professional traders, IBKR (as with Saxo Markets) also offers on-exchange futures and options trading, so comes in second and IG, third.
| Advanced Features: | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| Voice Brokerage | ✔️ | ❌ | ✔️ | ❌ | ✔️ | ✔️ | ✔️ | ❌ |
| Corporate Accounts | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
| Level-2 | ❌ | ✔️ | ❌ | ❌ | ❌ | ✔️ | ✔️ | ❌ |
| Algo Trading | ❌ | ✔️ | ❌ | ❌ | ✔️ | ✔️ | ✔️ | ❌ |
| Prime Brokerage | ❌ | ✔️ | ✔️ | ❌ | ❌ | ✔️ | ✔️ | ❌ |
For more information on professional trading accounts, see our dedicated pro trader comparison page.
IG tops this list as they are a publicly listed CFD broker and offer DMA CFD trading and a personal service for larger clients.
Saxo Capital Markets is another good CFD broker for HNWs, as you can trade DMA, buy physical shares, bonds, and trade all sorts of exotic derivative products. They also have professional brokers available over the phone for trading if you want to work VWAP or other algo orders that may otherwise move the market if you did them yourself.
Which CFD Broker Has The Cheapest Commission & Spreads?
Saxo Markets and Interactive Brokers have the cheapest commission for CFD trading. City Index and CMC Markets often have the highest spreads.
| Trading Costs |  | | |  |  | | |  |  | |
|---|---|---|---|---|---|---|---|---|---|---|
| FTSE 100 | 1 | 1 | 1 | 1 | 1 | 0.01% | 1 | 1 | 1 | 1.7 |
| DAX 30 | 1.2 | 1.2 | 1 | 0.9 | 1 | 0.01% | 1.2 | 1.2 | 1.8 | 1 |
| DJIA | 3.5 | 2.4 | 2 | 2.4 | 3 | 0.01% | 4 | 2.4 | 5 | 3 |
| NASDAQ | 1 | 1 | 1 | 1 | 1 | 0.01% | 2 | 1 | 1.9 | 1 |
| S&P 500 | 0.4 | 0.4 | 0.5 | 0.4 | 0.5 | 0.01% | 0.6 | 0.4 | 0.7 | 0.5 |
| EURUSD | 0.5 | 0.6 | 0.7 | 0.09 | 0.6 | 0.00% | 0.6 | 0.6 | 0.8 | 0.9 |
| GBPUSD | 0.9 | 0.9 | 0.9 | 0.28 | 0.7 | 0.00% | 0.9 | 0.9 | 1.3 | 1.4 |
| USDJPY | 0.6 | 0.7 | 0.7 | 0.14 | 0.6 | 0.00% | 0.7 | 0.7 | 0.8 | 1.4 |
| Gold | 0.8 | 0.3 | 0.3 | 0.05 | 0.6 | 0.00% | 0.4 | 0.3 | 0.28 | 0.35 |
| Crude Oil | 0.3 | 0.28 | 3 | 2 | 0.5 | 0.00% | 3 | 0.28 | 0.4 | 3 |
| UK Stocks | 0.008 | 0.001 | 0.001 | 0.001 | 0.0005 | 0.02% | 0.002 | 0.001 | 0.30% | 0.0008 |
Some CFD trading platforms have fixed spreads, no matter how wide the underlying markets, for example, others have variable spreads which they widen and tighter depending on volatility and liquidity. For example, economic indicators like non-farm payrolls can make the market more volatile and widen spreads. Whereas, high market liquidity times like the open and close can mean that spreads are tightened. The general norm though is for brokers to offer spreads slightly wider than the underlying bid/offer to incorporate their commission.
What Is The Best CFD Trading Platform For Market Access?
IG offers the best market access with 17,000 instruments available to trade on it’s CFD trading platform. Plus you can trade CFDs with DMA (direct market access) and work orders inside the bid/offer spread.
| Market Access: | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|
| Total Markets | 12000 | 17000 | 11000 | 1200 | 9000 | 5233 | 10000 | 8,000 | 3700 | 2,100 |
| Forex Pairs | 84 | 51 | 338 | 62 | 182 | 100 | 54 | 20 | 138 | 57 |
| Commodities | 25 | 38 | 124 | 32 | 19 | 20 | 20 | 10 | 28 | 22 |
| Indices | 21 | 34 | 82 | 28 | 29 | 13 | 17 | 10 | 23 | 25 |
| UK Stocks | 3500 | 3925 | 745 | 192 | 5000 | 500 | 1575 | na | 450 | 230 |
| US Stocks | 1000 | 6352 | 4968 | 880 | 2000 | 3500 | 2110 | na | 1575 | 1080 |
| ETFs | n/a | 2000 | 1084 | 107 | 675 | 1100 | 160 | na | 0 | 138 |
Why choosing a CFD broker based on what markets you can trade is important.
The more market access the better, as you want flexibility when trading to give you as many opportunities as possible.
The major markets for CFD trading are:
- Forex
- Indices
- Shares
- Commodities
- Treasuries
While you can trade more things with Saxo Markets overall, IG has one of the widest choices of markets to trade CFDs on. If you want to trade something unusual, Spreadex will also look at markets on request.
Which CFD Broker Offers The Most Account Types?
IG offers the most account types with CFD trading, spread betting, DMA access, CFD options, and also general and ISA accounts for your longer-term investing.
Choosing a CFD broker that offers DMA CFDs
| Account Types: | | | | | | | | |
|---|---|---|---|---|---|---|---|---|
| CFD Trading | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
| Spread Betting | ✔️ | ❌ | ✔️ | ✔️ | ✔️ | ❌ | ✔️ | ✔️ |
| DMA | ❌ | ✔️ | ❌ | ❌ | ❌ | ✔️ | ✔️ | ❌ |
| Pro Accounts | ✔️ | ✔️ | ✔️ | ✔️ | ❌ | ✔️ | ✔️ | ✔️ |
| Investments | ❌ | ✔️ | ❌ | ❌ | ❌ | ✔️ | ✔️ | ❌ |
| Futures & Options | ❌ | ✔️ | ❌ | ❌ | ❌ | ✔️ | ❌ | ❌ |
There are two types of CFD trading DMA, where you execute your trades directly on the exchange order book or OTC where you are trading on your broker’s bid/offer prices. Whilst technically all CFD trading is OTC (over-the-counter) because you are entering into a contract between the opening and closing difference in price with your broker, DMA CFD trading is when your OTC CFD orders are routed directly to the exchange.
The main advantage of DMA (direct market access) CFD trading is that you get better prices.
For DMA CFD trading your CFD broker will charge a commission after you execute a trade, but for OTC CFD trading, the commission is included in the spread.
Being able to buy at the bid rather than the offer and sell at the bid rather than the offer can make a big difference to when you enter and exit positions. However, many traders prefer OTC CFD trading where commission is included the spread as it makes calculating P&L and exit points simpler.
Which CFD Broker Trading Platform Has The Best Added Value?
City Index provides the best trading signals through Smart Signals and post-trade analytics through Performance Analytics.
| Added Value: | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|
| Trading Ideas | ✔️ | ✔️ | ✔️ | ❌ | ✔️ | ❌ | ✔️ | ✔️ | ❌ |
| Client Sentiment | ❌ | ❌ | ✔️ | ❌ | ❌ | ❌ | ✔️ | ❌ | ❌ |
| Post Trade Analytics | ✔️ | ❌ | ❌ | ❌ | ❌ | ✔️ | ✔️ | ❌ | ❌ |
| News & Analysis | ✔️ | ✔️ | ✔️ | ❌ | ❌ | ✔️ | ✔️ | ❌ | ✔️ |
| Web Based Platform | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ | ✔️ |
Get added value from your CFD broker with trading tools
Most CFD brokers provide some kind of research and analysis on the markets for their customers. But generally, the better the broker, the better the research, tools and analysis. For example, some brokers like IG will provide lots of analysis tools, economic calendars, stock screeners and technical analysis signals. Whereas, others like Plus 500 will only provide a trading platform with no added value. It costs a lot of money to hire analysts and provide data to clients, and some of it (if you know how to use it) can be exceptionally useful.
Technical analysis provides a good overview of the markets, based on charts and historical data
- Fundamental analysis uses company financial releases to evaluate the health of a share price.
- Economic data and calendars show when important announcements are due that could result in a price move.
Here’s where you can find out about 2020’s award-winning brokers.
Which CFD Broker Offers The Most Account Base Currencies?
Interactive Brokers let you have complete control over your FX and you can have an account in almost any major currency.
Whereas other brokers like Saxo Markets will give you the choice of a few currencies and automatically convert your P&L into whatever base currency you are trading. So you can run three separate subaccounts in GBP, USD and EUR, depending on what you trade.
Whilst other more retail focusses CFD provides like eToro only let you trade in USD, so it doesn’t matter if you deposit GBP and trade GBP stocks and have GBP P&L, your account base currency will always be in USD.
Managing your foreign exchange exposure
When you trade CFDs the trade is usually settled in the contract currency. So, if you trade the FTSE, your P&L is in GBP, when you trade the US30, your P&L is in USD and when you trade USDJP your P&L is in JPY. This can result in lots of different currency conversions racking up FX fees, or it can result in you running a deficit in a currency and being charged interest. This is one area where CFD trading differs from financial spread betting where no matter the currency of an instrument your P&L is always in your base currency.
What Is The Best CFD Broker For Indices Trading?
IG offers the most (80) global stock market indices for trading, as well as ETFs. Spreads are competitive and IG also offer index trading at the weekend on European, UK, Asian and US indices.
IG offers CFD trading on over 80 global indices, as well as ETFs. Index trading is fairly straightforward and is second only to forex trading in popularity, and CMC Markets comes in a close second as their primary focus is Forex. Saxo Markets are also a good choice for trading indices via CFD, and for more information, you can compare all brokers for trading indices here.
What Is The Best CFD Broker For Stocks & Shares?
Saxo Markets has a great offering for UK CFD trading and also the option (as with IG) to trade UK stocks via DMA.I
| CFD Broker | UK CFD Shares | US CFD Stocks |
|---|---|---|
| CMC Markets | 745 | 4,968 |
| IG | 3,925 | 6,352 |
| Pepperstone | 192 | 890 |
| Saxo | 3,500 | 1,000 |
| City Index | 5,000 | 2,000 |
| Spreadex | 1,575 | 2,110 |
| IBKR | 500 | 3,500 |
| XTB | 230 | 1,080 |
Spreadex is also worth a look as they have recently launched CFDs (in addition to spread betting). Spreadex are a much smaller broker but offer personal traders who can work CFD orders on smaller stocks on request.
If you are trading UK stocks via CFD then IG is your best option because they offer some unique trading features that others don’t. For instance, you can trade CFDs on the grey market price of an IPO before it lists. IG offer weekend and out-of-hours trading on UK stocks, as well as CFD trading on smaller cap UK stocks.
If you are going to trade US stocks via CFD, you may as well do it with a US broker, and the best of the bunch is Interactive Brokers, AKA IBKR for short. IBKR was the pioneer of electronic trading (read up on them in our interview with Thomas Peterffy, the founder and CEO). While the Americans are not allowed to trade CFDs themselves, IBKR offer CFD trading through their UK office.
Saxo and IG are a close second and third as both brokers offer round the clock CFD trading on US shares. Both brokers offer DMA and out of hours trading, although IG pips Saxo to second place because of their presence in the US (albeit for forex trading only).
For more information on trading shares as a CFD read our how to choose an equity CFD broker.
What Is The Best CFD Broker For Commodities Trading?
CMC Markets has one of the broadest ranges of commodities trading via CFDs. If you want the simplicity and flexibility of trading commodities via CFD then CMC have an excellent offering.
The below chart shows how many commodities markets a CFD broker offers:
Most CFD trading platforms and CFD brokers offer access to gold, silver and crude oil, a good CFD trading platform for trading commodities should also include the lesser traded softs and exotic commodities.
For a full breakdown of CFD brokers that offer commodities trading, view our comparison table.
What Is The Best Broker For CFD Options Trading?
Saxo Markets stands out, with an excellent options board on a wide range of markets that can be traded as a CFD. CFD trading on options has grown in popularity as brokers try to compete on market coverage.
Most CFD brokers offer a smattering of CFD options on the most popular traded instruments like US stocks and major indices and forex pairs.
Below we have ranked how many CFD options markets the main CFD trading platforms offer:
- Saxo Markets: 1,200
- IG: 50
- City Index: 40
- Spreadex: 5
- CMC Markets: 0
For more information on brokers offering options trading, view our options broker comparison table.
Which CFD Broker Has The Best Leverage & Margin Rates?
For retail clients CFD margin is standard across brokers since ESMA and the FCA introduced caps on what margin is available to retail CFD trading. Current margin rates for retail CFD traders are:
- Indices: 20%
- Major Forex pairs: 3.33%
- Commodities: 10%
- UK & US shares: 20%
Choosing a CFD broker based on margin and leverage
Professional trader margin rates vary from broker to broker and the lower the margin requirements, the more exposure you can have with the least funds on the account. You can compare professional CFD trading margin in our comparison table, but beware, the lower the margin, the riskier a trade, as you are leveraging your money sometimes up to 500 times.
So, if you have £1,000 on account, you could have £500,000 of exposure. If a price moves 10%, you have lost £50k, meaning that you owe the broker £49k. Many brokers now are introducing no negative equity protection, which means that you can never lose more than your account balance. Of course, this means that the leverage on offer will be reduced.
Can you make a living from CFD trading?
Yes, you can trade CFDs for a living but you will need a lot of risk capital and a good track record. I’ve been involved with CFD brokers for about 20 years and have seen all types of traders try and make a living from CFD trading. In this guide, I will explain how you
Can you make money through a CFD trading platform?
Yes, it is possible to make money with an online trading platform. However, it is also possible to lose money. If you want to be a profitable CFD trader then you need to follow some golden rules of CFD trading. It’s not difficult to make profitable trades, but what is difficult is ensuring that you
What is CFD trading and how do you trade contracts for difference?
Before you can learn to trade CFDs, it’s important to understand what they are and what they are not. CFDs, have been around since the early 90’s and were primarily used by hedge funds and institutions to trade stocks and shares on margin. However, over recent years, with the rise of online trading platforms, retail
What Are The Major Costs Involved When Trading CFDs?
CFD trading platforms make money in two principal ways firstly if they act as agents they earn a commission on each trade their clients make and an income from the overnight funding charges they levy. However they may also act as principal in which case they make prices to their clients and capture the spread
What Are The Best CFD Trading Strategies?
CFD trading platforms offer the facility for you to trade the financial markets, but only you can implement a winning strategy to make money trading. If you are looking for a CFD trading strategy, these three golden rules are a good place to start: 1) Run your wins, cut your losses This requires discipline and
Spread Betting vs CFD Trading: Key Differences Explained
On the surface, CFD trading and spread betting may seem similar, but there are some quite significant differences. In this guide, we will explain in greater detail the differences between CFD trading vs spread betting and why the two products that seem quite similar are actually very different. Differences between spread betting and CFD trading
Advisory CFD Brokers: Avoiding Commission Hungry Salesmen
Advisory CFD brokers are not as rampant as they used to be, but they are still around in one capacity or another. So here are our three golden rules to avoid being ripped off by advisory CFD brokers. CFDs are a very high-risk product and should only be traded by individuals who have significant trading
What are STP/ECN CFD brokers and should you be using one?
If you want direct access to FX liquidity pools you may need an ECP or STP forex trading platform. An ECN (ECN stands for Electronic Communications Network) forex trading platform is an electronic communications network, and in FX trading, that network is made up of trading counterparties. These trading counterparties are also known as liquidity
Guaranteed stop losses: What are they and which CFD and spread betting brokers offer them?
If you are looking for an online trading platform that offers guaranteed stop losses, we’ve put together a handy little guide on what guaranteed stop losses are, their advantages and disadvantages and also which brokers offer them. What is a guaranteed stop? Guaranteed stop losses are stops are like normal stop losses but differ in
How to open a CFD trading account?
The process for starting to trade CFDs is: Compare CFD trading accounts: When you are comparing CFD accounts, it is a good opportunity to decide if you want to trade on margin with a CFD or a financial spread bet. Whilst both CFD and spread betting offer leveraged trading, there are some differences between the
How do CFD brokers make money?
CFD trading platforms have three potential sources of income, trading revenue (commissions or spreads), financing charges and the b-book. Trading Revenue It’s common for a broker to charge a commission or widen the spread around the market. If a broker offers DMA, CFD trading commission will be added post-trade, otherwise, CFD commission will be bu…
What are CFD Stocks & Where to Find CFD Brokers to Trade Them
There are literally thousands of CFD brokers that operate around the world and most will accept clients from the UK. But how do you know which one is best and where to start? We’ve put together a comparison of CFD brokers so you can compare CFD trading platforms, that are industry leaders and offer the best
Where can I trade US Stocks as CFDs?
A reader has asked: I am looking for the best and lowest spreads/ commissions CFD Broker with the largest number of USA shares offered for CFD? Answer: One of the things a trader needs to reconcile when choosing a broker is cost versus coverage, though that usually forms part of a wider discussion about how well
Should you enrol on a trading course to learn to trade forex, spread betting or CFDs?
If you want to start trading should you sign up for a forex trading course? No is the short answer. You should not trust a forex trading educational course as far as you can throw it. Chances are it will be a scam. Forex trading educational courses make money by either charging you for some
CFD Scams – What are they and how to spot them
We talk endlessly about CFD (contracts for difference) scams and how to avoid them. We’ve done surveys on what people do when they spot fake investment ads online, written guides about how to avoid getting hoodwinked by commission-driven advisory brokers, explained that trading educators are best avoided, yet still investors are being lured into of…
What’s the difference between equity DMA CFDs and spread betting?
If you are wondering if trading with direct market access is for you and what the difference is, then here is the breakdown. Trading with direct market access (or DMA) enables you to place your orders direct with the exchange through a broker. Which means instead of having to buy at the offer (the higher
Where to trade Canadian shares as a CFD – plus the pros and cons of doing so
If you want to trade Canadian shares as a CFD here’s a quick rundown of three decent brokers to trade through. Three Top CFD brokers for trading Canadian stock CFDs IG – huge range of Canadian stocks as a CFD or spread bet Saxo – equally large range as a CFD, physical stock plus options trading and DMA too.
Trading CFDs in your SIPP. Could you and should you?
Managing your own SIPP certainly gives you a significant amount of control over your long term investments. But should you include CFDs in a SIPP account and which brokers offer CFDs in a SIPP? Here are the basics of trading CFDs in a SIPP account… Firstly can you hold CFDs in a SIPP? Yes, you
Why no decent spread betting or CFD broker should actually want churn and burn clients
Peter Cruddas, the founder of leading spread betting broker CMC Markets was quoted in The Times this morning in an article about the end of churn and burn broking. Cruddas highlighted that the days of high client turnover was gone for CMC and that they were focusing on only the “tastiest fish in the sea”
Can you use shares in your portfolio as collateral for CFD trading and spread betting?
Yes, some brokers will let you lodge liquid shares, bonds or funds as collateral for CFD trading or financial spread betting if you have a professional trading account. However, should you? In general, I like to be positive about spread betting. We’ve often said it is one of the greatest innovations to happen for private
CFD Brokers FAQs
Yes. If you have a professional CFD trading account, you can lose more than your account balance. However, for CFD traders classified as retail clients, there is negative balance protection, which means that your CFD trading account is guaranteed to not go into negative equity.
- Further reading: If you want a safer way to trade, try comparing share dealing accounts
Yes, CFDs can provide long-term investors with a way to hedge portfolio risk in periods of market volatility, and for traders to create market-neutral pairs trading and spread strategies.
- Further reading – Use these inverse ETFs in a bear market to protect your portfolio.
The most popular traded markets on CFD trading platforms are forex, indices and stocks as these have the most liquidity and news flow. You can see why they are so popular in our guide to the best markets for CFD trading.
In theory, you can keep a CFD trade open indefinitely. However, as overnight financing charges can add up quickly, CFD trading is more of a short-term speculation tool or hedge rather than a product for long-term investing.
- Further reading – what are overnight financing charges?
Yes. You have to pay capital gains tax on CFD trading profits. You can offset CFD trading losses against other investment profits.
STP means Straight Through Processing, which means that when you put an order in, it goes into the market and the broker buys or sells on your behalf. The alternative is where a broker matches up with other traders or does not hedge your positions at all. In the grand scheme of trading, it does not matter whether your broker is STP or uses a B-Book. You make money if you call the market right. You can’t blame the broker if your trades are not profitable.
Here’s more about ECN brokers and STP brokers which may be of interest to more experienced traders
When you are trading CFDs the tighter the spread, the better, as this reflects what your trading costs are. The CFD spread is usually a fixed amount per share and for things like Forex and Index trading and is comparable to a percentage.
For example, if on your CFD trading platform the spread on Vodafone shares could be 0.25% from the actual price, and this represents a commission of 0.25% on the value of the trade. Or if you are trading the FTSE 100 and the market price (or bid/offer) is 5801 (to sell), 5801.5 (to buy), a CFD broker may offer a spread of 5801 (to sell) and 5802 (to buy), which means they have widened the spread by 0.5.
The size of the bid-offer spread quoted by a CFD broker is important because it has a big impact on the cost of your trading. If a CFD platform quotes spreads that are 0.5 points wide and you are trading 1,000 CFDs, the cost of each trade will be £5. So, if you trade 100 times over a year, you will have paid £500 in dealing costs. But, if that spread is 1 point instead of 0.5 points, you will have paid £1,000 in spreads. The difference of £500 can have a significant impact on your profit and loss.
- Want to know how much your trading costs over a year? Try our trading cost calculator.
Yes, you can scalp with CFD brokers like IG, City Index and Saxo Markets.
If you are scalping the market and trying to make lots of small, profitable trades, the tightness of a spread can make all the difference between success and failure. Essentially, narrower spreads mean quicker potential profits and wider spreads mean greater price changes needed to make a profit.
- Further reading: what is scalping and what brokers allow it?
Some CFD brokers in the UK offer financial spread betting as well because CFDs are fairly similar in some respects but very different in others.
The key similarities for both financial spread betting and CFD trading are:
- You can go long and short
- You can trade on margin
- Both are OTC derivative products
- Both are regulated by the FCA
- Both are a high-risk investment product
The key differences between CFD trading and financial spread betting are:
- Spread betting is free from capital gains tax, CFDs profit and losses are taxable
- With spread betting, you bet a certain amount per point move
- With CFDs, you buy an equivalent amount of CFD as you would shares
CFDs are available to international clients - Financial spread betting is unique to the UK
Here’s a video and some more information on the difference between spread betting and CFD trading.
Yes, you can trade cryptocurrency CFDs in the UK if you have a professional trading account. If you are not an experienced trader and are classified as retail, the FCA has banned crypto derivatives, so you cannot trade cryptocurrency.
Richard Berry
This article contains affiliate links which may earn us some form of income if you go on to open an account. However, if you would rather visit the CFD brokers via a non-affiliate link, you can view their CFD trading pages directly here: