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7 Best CFD Brokers: Trade Smarter With Our Expert Picks 2024

Discover the top 7 CFD brokers for 2024 & trade smarter with our expert picks. Make informed decisions with our comprehensive broker reviews and analysis.

Best CFD Brokers: Trade Smarter With Our Expert Picks
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Using a CFD trading platform can enhance your trading skills and elevate your performance to new heights. However, avoid falling into the unfortunate statistic of the 70-80% of retail traders who experience financial losses with this strategy. The world of CFD trading is renowned for its lack of consistency. The experience can vary significantly among traders and may even be inefficient sometimes. 

To navigate this challenging landscape successfully, it’s imperative to select one of the top-notch CFD trading platforms. These platforms collaborate closely with leading CFD brokers and will be your reliable partner in this risky and often poorly regulated domain.

7 Best CFD Brokers

IG – Best CFD Broker Overall

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IG provides a comprehensive trading package with top-notch trading and research tools, exceptional education resources, and a wide range of tradable markets. As a reputable multi-asset broker, IG is publicly traded and regulated worldwide.

Besides offering nearly 20,000 CFDs (Contracts for Difference), IG provides non-CFD exchange-traded securities for residents of the U.K., Germany, and Australia who wish to access international stock exchanges. 

IG offers exchange-traded Turbo warrants alongside forex options through Spectrum, its Multilateral Trading Facility (MTF) in Europe. They offer listed derivatives in the U.S. via tastytrade. Eligible clients can also consider IG Bank in Switzerland.

With its excellent services and diverse offerings across various global markets, IG remains at the forefront of the industry.

Pros:

  • Exceptional tools and platforms
  • Access to 19,000+ tradable assets
  • Competitive pricing

Cons:

  • Lack of preset layouts on the main web platform
  • Limited product variety on MT4

Interactive Brokers – Best for Professionals

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Interactive Brokers has established itself as a highly reputable multi-asset broker with its vast array of tradeable global markets. Offering competitive fees, top-notch research and education resources, and a modern trading platform suite that’s on par with institutional standards.

Having been founded in 1977, Interactive Brokers is publicly listed on the NASDAQ (IBKR) and operates under the regulation of nine Tier-1 jurisdictions. This level of oversight ensures that Interactive Brokers maintains its status as a trusted and well-capitalized broker. With Ending Client Equity totaling USD 373.8 billion and Equity Capital of USD 10.01 billion.

Interactive Brokers provides customers access to an extensive range of global financial markets, including stocks, options, futures, and spot forex trading opportunities. Offering comprehensive services to cater to the diverse needs of traders worldwide.

Overall, Interactive Brokers is a reliable choice for traders seeking professional brokerage experience and competitive offerings across various asset classes in the financial market landscape.

Pros:

  • Powerful platform for professionals
  • Diverse global market coverage
  • Comprehensive research resources

Cons:

  • Trader Workstation may be too complex for beginners

CMC Markets – Best Platform Technology

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CMC Markets has garnered a strong global reputation, offering traders an exceptional trading journey through its superb pricing and extensive range of over 12,000 tradable assets. Renowned as a frontrunner in cost-effective forex trading, CMC Markets boasts significantly lower trading expenses compared to others in the industry.

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Active traders can enjoy competitive pricing; however, the availability of discounts and rebate programs may vary depending on your country of residence and applicable regulations. The Next Generation platform by CMC Markets showcases an impressive array of over 12,000 tradable instruments.

Pros:

  • Affordable trading fees
  • Outstanding web and mobile platforms
  • Strong research resources

Cons:

  • Room for improvement in educational resources

Saxo Bank – Best Web-Based Trading Platform

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Saxo Bank stands out as a top-tier broker, offering a wide range of assets and an exceptional trading platform. With an impressive selection of over 40,000 securities and access to over 70,000 instruments (availability may vary based on location), including crypto derivatives, micro-futures, and forex options.

Saxo Bank's flagship platform, SaxoTraderGo, provides traders with all the tools to navigate the market effectively. One notable aspect is how Saxo Bank seamlessly integrates the outstanding web-based experience of SaxoTraderGO across different devices. 

We have found Saxo Bank's mobile app for SaxoTraderGO to be one of the favorites in the industry, it can easily compete with other top-notch forex brokers like IG, CMC Markets, and TD Ameritrade (available only for U.S. citizens).

Pros:

  • Premier flagship platform
  • Access to 40,000+ tradable assets
  • Exceptional customer support

Cons:

  • Elevated minimum deposit

XTB – Great Research and Education

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XTB, a reputable multi-asset broker, stands out with its exceptional customer service and an extensive range of forex and CFD offerings, delivering an outstanding trading experience. The xStation 5 trading platform, known for its sleek design and innovative features, enhances the trading journey. Notably, XTB earned the prestigious title of 'Best in Class for Research in 2023,' owing to its comprehensive educational resources and research tools.

With XTB, traders gain access to a diverse selection of CFDs, encompassing 1,848 stocks, 135 ETFs, 22 commodities, 36 indices, 5 cryptocurrencies, and 57 forex pairs. XTB extends its services to include nearly 7,800 cash equities (non-leveraged) and 150 ETFs in its securities offering, although these aren’t accessible from its U.K. or Cyprus branches. For a quick overview of the various investment products available to XTB clients, refer to the table below.

For account types, XTB offers two options: a Standard account with spreads and a Professional account with commission-based pricing. The Professional account is reserved for clients who qualify as elected Professionals in the U.K. and Europe. While XTB's pricing aligns with industry standards, it falls slightly behind the top brokers in this category.

Pros:

  • xStation 5 platform excels in the industry
  • Abundant trading tools
  • Exceptional customer support

Cons:

  • Pricing is merely average

Plus500 – Best for Experienced CFD Traders

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Plus500, a specialized CFD broker, provides trading options including stocks, forex, commodities, ETFs, options, indices, and cryptocurrencies. With over 2,000 instruments in its portfolio, Plus500 offers traders the convenience of its proprietary WebTrader platform as well as mobile apps for iOS and Android devices.

Unlike traditional brokers who charge commissions on trades, Plus500 makes money through spreads. Besides this revenue model, they also apply an overnight funding fee and an inactivity fee of $10. 

If you hold instruments in a currency that differs from your account's currency, Plus500 may charge a currency conversion fee of up to 0.7% on all trades. This fee can also be imposed when using the Guaranteed Stop Order feature. To cater to their diverse clientele base worldwide, Plus500 provides customer support in 32 languages. 

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They have created a dedicated webpage with answers to frequently asked questions (FAQs) and offer an online form for submitting additional queries not covered by the FAQ section. The firm boasts round-the-clock online support through their team.

Pros:

  • Tight spreads, no commissions
  • Regulated by six authorities
  • 24/7 support in 32 languages
  • User-friendly, responsive trading app

Cons:

  • Limited to derivative trading
  • Limited educational materials

eToro – Best for Transparent Fees

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eToro offers a streamlined experience, especially when it comes to CFD trading instruments. It’s no wonder that eToro is considered to be the best platform for beginners in CFD trading. Besides its user-friendly app (which our editorial team rates as the top stock trading app), eToro provides an extensive selection of stock and crypto CFDs. 

If you’re a long-term investor in cryptocurrencies, it may be more beneficial to hold these assets in a retirement account read our Bitcoin IRA review for more information.

One of the advantages of eToro is its uniform and transparent fee structure, making it easier to incorporate them into your trading strategy. This is crucial not only for beginners but also for anyone interested in these high-risk trading products.

eToro's Social Trading features can be useful for new CFD traders who want guidance on implementing this complex strategy. By learning from experienced traders within eToro's vast social network, you can gain insights and ideas for your own trades.

Pros:

  • Intuitive trading platform
  • Paper trading
  • Extensive CFD selection
  • Transparent, standardized fee structure with low rates

Cons:

  • Limited to USD accounts

Our Ranking Methodology for the Best CFD Brokers

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When it comes to traders and investors, choosing the right CFD (Contract for Difference) broker is of utmost importance. CFDs serve as derivative products that enable individuals to speculate on the price fluctuations of different financial instruments, all without actually owning the underlying assets. 

Our selection process for identifying the best CFD broker involved careful consideration of various key factors. Below, you will find a comprehensive breakdown outlining our criteria for making this decision.

  • Regulatory Compliance: The foremost and most pivotal consideration is to ensure that the CFD broker operates under the regulation of a well-respected financial authority. Regulatory bodies like the Financial Conduct Authority (FCA) in the UK or the U.S. Commodity Futures Trading Commission (CFTC) offer vital investor protection and ensure brokers adhere to stringent regulations and standards.
  • Asset Variety: We examined the array of assets available for CFD trading through the broker. A reputable broker should grant access to a diversified selection of instruments encompassing stocks, indices, commodities, currencies, and cryptocurrencies, enabling you to construct a well-rounded portfolio.
  • Trading Platform: The trading platform serves as your primary interface for executing trades. It should combine user-friendliness, reliability, and essential tools for technical analysis. While MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are popular options, proprietary platforms can also excel.
  • Trading Expenses: We considered the cost structure, encompassing spreads (the difference between buying and selling prices), commissions, and overnight financing fees (swap rates). Lower trading costs can exert a significant influence on your overall profitability.
  • Leverage: Leverage affords the capacity to control larger positions with a smaller capital outlay. Although it can amplify profits, it concurrently heightens the risk of substantial losses.
  • Risk Management Tools: The broker should furnish risk management tools, such as stop-loss and take-profit orders, guaranteed stop-loss, and safeguards against negative balance, facilitating effective position management and loss mitigation.
  • Research and Analytical Resources: We had access to real-time market data, charting tools, technical and fundamental analysis resources, and economic calendars, all of which are essential for making well-informed trading decisions.
  • Customer Support: We evaluated the quality and availability of customer support. Responsive and well-informed customer service is invaluable for addressing concerns or obtaining assistance with trading-related inquiries.
  • Deposit and Withdrawal Methods: We confirmed that the broker offers secure and convenient deposit and withdrawal options. Transaction fees and processing times were also taken into consideration.
  • Educational Resources and Research: Numerous leading CFD brokers deliver educational materials, webinars, and research reports to aid traders in enhancing their skills and staying informed about market developments, which can be especially beneficial for beginners.
  • Mobile Trading: The prevalence of mobile trading apps has grown. We assessed whether the broker offers a dependable mobile app compatible with your device's operating system.
  • Order Execution and Slippage: Dependable order execution and minimal slippage are paramount in CFD trading. The broker should uphold a transparent order execution policy and make efforts to fulfill orders at the specified prices.
  • Reputation and Feedback: We examined reviews and sought input from fellow traders to gauge the broker's standing. We also looked for any history of regulatory violations or unethical conduct.
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Best CFD Brokers – Buyer’s Guide

What Are CFDs?

CFDs are tradable instruments that mirror the value of underlying securities or assets. When a trader engages in a CFD trade, they agree with their broker to purchase or sell a specific underlying asset or security at a predetermined price. 

The aim of this transaction is to speculate on potential price changes that may occur between the time the agreement is made and when it comes into effect, as well as before it expires (or before the trade is closed).

As the value of the underlying asset fluctuates, the CFD trader will experience either an unrealized gain or an unrealized loss (or neither if there’s no change in price). Profits are only realized if the trade is closed while still profitable.

For instance, a trader purchases a CFD based on EUR/USD pairs and subsequently sees an increase in contract price above their initial purchase price. In this scenario, their unrealized profit would be calculated as the difference between these two prices (minus any applicable trading fees).

Let's talk about losses for a moment: It's crucial to remember that actual losses can become more severe if there’s a margin call or a gap in a stop-loss order. This additional risk arises because CFDs are traded within a margin account, which has the possibility of accumulating a negative balance as leverage is used.

Short CFD Trading

Engaging in short CFD trading, or "going short," enables you to start a CFD position that yields profits when the market value of the underlying asset declines. In this situation, you’re speculating on a decrease in profitability. Another term for "going short" is "selling."

Long CFD Trading

When engaging in long CFD trading, also known as "going long," you can initiate a conventional CFD trade. This type of trade results in profits when there’s an increase in market prices. Essentially, by "going long," you’re making a purchase.

How Are CFDs Different From Stocks?

When you buy a stock through your broker's trading platform, the broker holds the shares or share certificates in your name. As the recorded shareholder, you have specific rights and benefits, including voting and participating in proxy meetings. You become eligible to receive potential dividends.

On the other hand, CFD traders don’t possess any ownership rights. When using a trading platform to purchase a CFD, you don’t actually own or take possession of the underlying asset itself. Rather, CFDs are financial instruments that reflect the price movement of an underlying asset like stocks.

  • Leverage: While certain traders, such as pattern day traders in the U.S., may have access to limited leverage when trading shares (up to 4:1), leverage is typically unavailable for trading cash equities (stocks). The situation differs for CFDs. For instance, CFD traders in the EU can use up to 5:1 leverage. (Note: CFDs aren’t available for trading in the U.S. or for U.S. residents).
  • Risk: Unlike trading or investing in traditional underlying stocks, where the likelihood of your portfolio reaching zero is rare, this isn’t the case with share CFDs. Share CFDs are tradable instruments that come with significant risk, and most retail CFD traders experience financial losses. Leverage introduces an additional layer of risk absent when trading underlying stocks. When trading CFDs, it's workable to deplete your entire account balance and, sometimes, even go into negative territory.

How Are CFDs Different From Forex?

The primary distinction between CFDs and forex (foreign exchange) lies in their nature. CFDs function as financial instruments, while forex operates as an asset class. 

When engaging in CFD trading, individuals speculate on the price movements of various asset classes without actually owning the underlying assets. Forex traders can take possession of tangible assets such as currencies under certain circumstances.

CFDs are derivative instruments that mirror the value of an underlying asset or security and don’t involve physical delivery. All CFD transactions are settled with cash and don’t entail any transfer of actual assets.

In contrast, specific types of spot forex trading allow traders to receive ownership of currency units involved in a transaction. For instance, if a trader purchases EUR/USD with the intent to possess it physically, they’ll pay for the trade using U.S. dollars and receive euros into their account accordingly. 

Conversely, when a CFD trader acquires EUR/USD positions, they cannot take delivery of any currencies but must instead close their position by selling an equivalent amount to exit their trade effectively.

In many cases, CFDs and forex demonstrate similar behavior. When it comes to retail forex trades, they often resemble CFD trades as they’re settled in cash. Retail forex traders do not physically possess any assets or actual currency. 

It’s important to note that non-deliverable forex and forex CFDs come with risks, and the level of regulatory protections may differ based on your jurisdiction or country of residence.

Pros & Cons of CFD Trading

Pros

  • Diverse CFD markets available, including assets not common in your home country
  • Easy ability to take both long and short positions when trading CFDs
  • Quick execution of most CFD trades, reducing potential slippage risks
  • CFD trading platforms usually feature cost-effective fees and commissions

Cons

  • Leveraged trading from a margin account carries high risk, potentially leading to a complete loss
  • Holding CFD positions overnight results in overnight fees, also called carry charges
  • CFD traders hold contracts, not actual asset ownership, which means no entitlement to dividends or shareholder rights
  • Capital gains tax applies to CFD trades

Are CFDs Legal in the U.S.?

No, CFDs aren’t legally permitted in the United States, and U.S. residents aren’t allowed to engage in CFD trading. In the U.S., CFDs are classified as derivatives and thus fall under the jurisdiction of the U.S. Commodity Futures Trading Commission (CFTC), which requires specific licenses for such activities. 

However, individuals residing outside of the United States can trade CFDs through various forex brokers' trading platforms, provided that these brokers accept clients from their respective countries of residence.

It’s worth mentioning that the CFTC also regulates the spot forex cash market. As a result, U.S. residents who wish to participate in forex trading must do so with a forex broker regulated by authorities within the United States (you can refer to our comprehensive guide on Best US Forex Brokers for help in finding such brokers).

Can CFD Trading be Profitable?

Indeed, it’s feasible to achieve profitability in CFD trading. However, it’s crucial to acknowledge that a significant majority of CFD traders experience financial losses annually. This fact is supported by the disclosed statistics from many CFD brokers who openly admit such occurrences. 

Many reputable CFD brokers warn that over 70% of retail CFD accounts result in monetary losses each year, with some cases exceeding 80%. Successful individuals engaged in CFD trading show consistent profits over extended periods of time and through a substantial volume of trades. 

They accomplish this by implementing trading styles that mitigate risk and employing strategies aimed at maintaining low average losses relative to their average profits (although executing these strategies can be challenging).

It’s imperative for CFD traders to establish a clear and consistent trading strategy specifically tailored for the world of CFDs. 

Equally important is the implementation of a robust risk management plan. Choosing an optimal CFD platform that offers an array of tools and features aligned with one's individual trading strategy would be wise.

Is CFD Trading a Good Idea for Beginners?

CFDs may not be the ideal option for beginners due to the additional risk associated with margin trading. When trading on margin, whether it's CFDs, forex, or other derivative products, there’s a higher level of risk compared to traditional investing. 

By leveraging your investment capital, you might increase the rewards and risks involved, which could even lead to a negative balance in rare instances. If you already have experience with conventional investments such as stocks or ETFs and are interested in learning how to trade on margin, starting with a demo account can be beneficial. 

Demo accounts provide traders with an opportunity to experiment and become familiar with trading software without putting their actual investment capital at risk. The software used in demo accounts is the same as that used in live accounts. However, virtual funds are used instead of real money for trades.

What Can You Trade With CFD Brokers?

CFD brokers provide a diverse selection of financial instruments for trading. Among the highly sought-after assets available for trading with CFD brokers are:

  • Stocks: CFD brokers grant access to a wide range of stocks from global markets, covering a spectrum of options, including established blue-chip stocks, smaller-cap equities, and even penny stocks.
  • Indices: Through CFD brokers, you can trade popular stock indices like the S&P 500, NASDAQ 100, FTSE 100, and DAX 30, among other notable choices.
  • Forex: CFD brokers facilitate participation in the foreign exchange market, offering an extensive array of currency pairs. This encompasses major pairs such as EUR/USD, GBP/USD, and USD/JPY, to name a few.
  • Commodities: With CFD brokers, traders can speculate on commodity price fluctuations, including precious metals like gold and silver, energy commodities like crude oil and natural gas, and agricultural products like wheat, soybeans, and corn.
  • Cryptocurrencies: CFD brokers open the door to the dynamic realm of cryptocurrencies, enabling trading of popular digital assets like Bitcoin, Ethereum, Ripple, and various other cryptocurrencies.

Before you trade CFDs with a broker, be aware of the risks involved. Leverage is used in CFD trading, which means that even small market movements can have a significant impact on your capital. 

It’s crucial to have a thorough understanding of these risks and consider seeking professional advice if necessary before you begin trading.

What to Look for in a CFD Broker?

When selecting the ideal CFD broker, there are many factors to consider. These include regulation, expenses, the variety of tradable asset classes, and the trading platforms.

Regulation

To safeguard your funds against internal company fraud or bankruptcy, it’s crucial to ensure that the broker you’re considering is regulated by the appropriate regulatory agency in their location. For instance, in the United Kingdom, the regulatory agency is known as the FCA, while in Australia, it goes by ASIC. This regulation serves as a protective measure for your financial security and peace of mind.

Cost of Trading

When engaging in CFD trading, there are various expenses you need to consider. These include the spread, holding costs, commission fees, and potential additional charges based on your chosen broker.

The spread refers to the discrepancy between the buy and sell prices listed in the order book. A narrower spread means that you can start making a profit with minimal price movement in your favor. Conversely, if prices move against you, a loss may occur.

At the close of each trading day, open positions in your account may incur a holding cost. When executing CFD trades, you will be charged a separate commission fee. Evaluate how convenient it is to deposit and withdraw funds from your trading account. Multiple funding options offered by your broker can enhance convenience and flexibility for traders like yourself.

Broad Tradable Asset Classes and Markets

You have a broader range of options for tradable asset classes and markets. You can trade various underlying assets such as stocks, indexes, commodities, currencies, cryptocurrencies, and ETFs.

Easy-to-Use Platform

Find a CFD trading platform that provides user-friendly trading software and CFD software, quick execution, top-notch trading tools, a pleasant trading experience, and an efficient order management system. 

If the interface is subpar and navigation is challenging, you might miss out on potential profits. The platform must be secure and allow for various types of orders to be placed.

Best CFD Brokers – Frequently Asked Questions

How Should I Choose the Best CFD Trading Platform for Me?

The selection of the optimal CFD trading platform is contingent upon your geographical location and the regulations set by your broker. For seasoned CFD traders, Interactive Brokers proves to be the top choice among CFD brokers, whereas eToro offers unparalleled benefits for novice individuals venturing into CFD trading.

Are CFD Brokers Legit?

CFD brokers are considered legitimate in most countries. However, it’s essential to note that CFD trading laws and regulations differ from country to country. For example, CFD trading is prohibited in the United States.

How Do I Choose a CFD Broker?

Begin by verifying the broker's regulatory standing to confirm that they operate under a respected regulatory system. Evaluate aspects such as transaction costs, the range of assets offered, options for leverage, and quality of customer support. 

Take the time to read reviews and seek advice from seasoned traders to assess a broker's reputation. Your selection should align with your trading objectives, risk tolerance, and the particular CFD markets you plan on engaging in.

Final Thoughts – Best CFD Brokers

Selecting the optimal CFD broker is a crucial decision for traders, with essential factors to consider, such as regulatory supervision, the range of assets available, user-friendly trading platforms, cost structures, risk management tools, and research materials. 

Consider the inherent risks associated with leveraged CFD trading and implement responsible risk management strategies to safeguard your capital. Ultimately, the key to a successful trading journey lies in making an informed choice of a CFD broker that aligns with your trading style and goals.

Disclaimer: The above is a sponsored post, the views expressed are those of the sponsor/author and do not represent the stand and views of Outlook Editorial.

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