Best CFD Brokers

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Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

Demand for CFD trading continues to soar among professional & retail traders alike, as CFDs represent the ideal instrument for short-term trading & hedging. Finding the best CFD brokers poses a challenge, with hundreds of available choices. We've researched them thoroughly to assist you in your trading journey.

1
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Price improvement technology, cost transparency & ultra-low trading fees.
Upgraded MT4 platform, MT5 & proprietary mobile app.
2
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
MT4, MT5, and cTrader trading platforms & Autochartist and Trading Central services.
MAM/PAMM modules for traditional account management & copy trading options.
3
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Choice of trading platforms & reasonable commission-free trading costs.
Guardian Angel MT4/MT5 plugin & good education for beginner traders.
4
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Trade 1,000+ financial instruments
Experience low, competitive spreads
Multiple funding and swift withdrawal options
5
The ratings shown on DailyForex.com are determined by hours of research from our editorial team into over 10 factors, including account fees, deposit/withdrawal options, regulatory status, tradable assets, and more.
Best ECN execution on the MT4 platform
Excellent implementation of cTrader and Smart Trader Tools

Top CFD Brokers List

  • FXTM, Best all-around broker with high floating leverage and fast execution.
  • FP Markets, ECN trading with leverage up to 1:500.
  • AvaTrade, Highly regulated, choice of fixed or floating spreads.
  • Eightcap, Competitive pricing + excellent daily videos.
  • Pepperstone, Great ECN execution on MT4 platform.

FXTM

5.0/5 in this category
In Summary
Best all-around broker with high floating leverage and fast execution

FXTM opened their forex/CFD brokerage firm in 2011 and are perhaps better known as “ForexTime”. The company is primarily regulated through the Cyprus Securities and Exchange Commission (CySEC), with additional regulation through the Financial Conduct Authority (FCA) UK, the Financial Services Commission (FSC) of the Republic of Mauritius, and by the Financial Sector Conduct Authority (FSCA) of South Africa. An important feature of FXTM is that it can tailor its offerings based on where its dealers are located in the world. This includes a wide range of forex pairs and crosses (including some exotics), gold, silver, natural gas and crude oil, as well as various cryptocurrencies, CFDs on major American stocks, and major equity indices

Pros
  • Excellent commission-based Forex pricing environment and transparency

  • Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app

  • Quality market research and educational content for beginner traders

  • A highly regulated broker with a tier-1 license

Cons
  •  No cryptocurrencies and limited choice of commodities

FP Markets

5.0/5 in this category
In Summary
ECN trading with leverage up to 1:500

The twelve MT4/MT5 add-ons at FP Markets upgrade the core trading platform to a competitive version. It also supports retail account management via the MAM/PAMM infrastructure and offers Autochartist to manual traders and VPS hosting to those with automated trading solutions. Myfxbook AutoTrade caters to social traders. The proprietary Iress trading platform remains location-restricted but is the only one offering access to the 10,000+ CFDs. Traders will benefit from the ECN cost structure of 0.0 pips raw spreads and a commission of $6.00 per round lot. The minimum deposit is $100, and the maximum leverage is 1:500. Additional benefits include an execution speed below 40 milliseconds and a no dealing desk (NDD) execution model. The unregulated FSC-registered unit caters to most international clients.

Pros
  • Choice of trading platforms and auxiliary trading tools

  • Very competitive cost structure and excellent asset selection

  • Low minimum deposit requirement and leverage of up to 1:500

  • Well-regulated and trustworthy

Cons
  • Availability of Iress geographically restricted

AvaTrade

4.5/5 in this category
In Summary
Highly regulated, choice of fixed or floating spreads

AvaTrade has an exceptional educational unit in SharpTrader, but traders must carefully consider the subsidiary they decide on. The ASIC, FSCA, BVIFSC, and FSRA provide a competitive trading environment. The minimum deposit of $100 unlocks maximum leverage of 1:500 and provides access to more than well-selected 1,250 CFDs. Traders also have a broad range of trading platform choices, including the core MT4/MT5, together with the proprietary WebTrader, AvaOptions, AvaTradeGO and AvaSocial. Additional copy trading platforms available at AvaTrade are ZuluTrade, MQL5 Signal Service and DupliTrade. The commission-free cost structure is average with minimum spreads of 0.9 pips or 0.13%.

Pros
  • High-quality educational offering via SharpTrader

  • Excellent choice of trading platforms catering to various trading needs

  • Broad asset selection and cross-asset diversification opportunities

  • Well-regulated and trusted broker with oversight from a central bank

Cons
  • Trading costs competitive but nothing special

Eightcap

4.5/5 in this category
In Summary
Competitive pricing + excellent daily videos

CFD traders get a competitive edge via the cutting-edge Capitalise AI service, available as an MT4 plugin. Eightcap lists over 800 CFDs, making manual trading inefficient. Capitalise AI allows traders to create algorithmic trading solutions in a code-free environment and complements the MT4/MT5 trading platforms. The former is the industry leader for algorithmic trading solutions, and the latter is a leading choice for equity CFD trading.

Traders get competitive fees in the commission-based raw spread account, and diversification across multiple sectors, including 180+ cryptocurrency CFDs, is available. Deep liquidity and superior order execution make Eightcap an excellent CFD trading platform.

Pros
  • Low minimum deposit and high leverage of up to 1:500

  • Competitive cost structure

  • Excellent technology infrastructure and seasoned management team

  • Daily research and quality educational content

Cons
  • Limited leverage in some areas

Pepperstone

4.5/5 in this category
In Summary
Great ECN execution on MT4 platform

Pepperstone, founded in 2010 and headquartered and regulated in Australia, the U.K., and Dubai, is probably the most well-known CFD broker in the world. As an ECN brokerage, Pepperstone offer raw spreads and low commissions. Taken together, Pepperstone’s “Razor” account offers one of the most competitive costs of trading in Forex that you will find anywhere. In addition to their global headquarters in Australia, Pepperstone also have presences in London, England, where they enjoy full regulation by the Financial Conduct Authority (FCA), and in Dubai, where they are regulated by the Dubai Financial Services Authority (DFSA).

Pros
  • Excellent choice of trading platforms consisting of MT4/MT5, and cTrader

  • Market-leading MT4/MT5 upgrade package, Autochartist, and API trading

  • Social trading support via Myfxbook, MetaTrader Signals, and DupliTrade

  • Leverage of up to 1:30 and superb trade execution

Cons
  • Demo accounts have 30-day time limits

Best CFD Trading Platform Comparison

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Regulators
CMA, CySEC, FCA, FSC Mauritius, FSCA ASIC, CySEC, FSCA ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID ASIC, CySEC, FCA, SCB ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB
Year Established
2011 2005 2006 2009 2010
Execution Type(s)
ECN/STP, Market Maker ECN/STP Market Maker ECN/STP, Market Maker No Dealing Desk, NDD
Minimum Deposit
$500 $100 $100 $100 $200
Average Trading Cost EUR/USD
0.1 pips 1.1 pips 0.9 pips 1.0 pips 1.1 pips
Average Trading Cost GBP/USD
0.2 pips 1.4 pips 1.5 pips 1.2 pips 1.6 pips
Average Trading Cost Gold
$0.18 $0.21 $0.29 $0.12 $0.20
Trading Platform(s)
MetaTrader 4, MetaTrader 5, Proprietary platform MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based Other, MetaTrader 4, MetaTrader 5, Web-based+ MetaTrader 4, MetaTrader 5, Trading View MetaTrader 4, MetaTrader 5, cTrader, Trading View
Islamic Account
Negative Balance Protection
N/A
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What is a CFD?

CFDs became the best trading instrument for professional traders and retail traders alike. First introduced in London in the early 1990s for professional clients and in the late 1990s to retail traders, they offer leveraged trading without owning the underlying asset. CFDs grant trading opportunities in a cost-efficient manner, as transactions do not require settlement of underlying assets. Therefore, it allows retail traders to participate in any market their broker provides.

Several regulators took steps to limit leverage or ban advertising of CFDs amid mounting retail losses related to an absence of understanding. They are an over the counter (OTC) product specifically written for leveraged transactions, but traders must understand the risks involved before using CFDs. CFD brokers are usually market makers who hedge exposure by taking positions in the underlying assets matching their order book. They also profit from client losses, with an average of 75% of retail traders managing loss-making portfolios.

Pros and Cons of CFDs

Pros

  • A vast universe of instruments to trade including shares, indices, commodities, and currency pairs.

  • The high degree of leverage available means you have small margin requirements, making CFD trading highly efficient.

  • You can short CFDs without having to go through the intricacies of traditional short selling.

  • CFDs are exempt from stamp duty (in the U.K.).

  • You can deduct your losses from profits for tax purposes (in the U.K.).

Cons

  • You can lose more than your initial deposit.

  • When used improperly, leverage can magnify losses so be sure to use solid money and trade management strategies to insulate your account from large losses.

  • Trading CFDs profitably requires skill and experience. Get to know the intricacies of the instruments you are trading and consider trading with a demo account for some time before risking any real money.

  • Any positions left open overnight are subject to funding fees.

  • CFD profits are subject to capital gains tax (in the U.K.).

Types of CFDs

Types of CFDs

CFDs are available on a huge range of assets including global indices, stocks, currencies, and commodities. Therefore, by trading CFDs you can diversify your positions increasing your market opportunities. Let’s examine the main differences between CFDs and other financial instruments.

CFDs vs. Forex: like Forex, CFDs are OTC (over the counter) products (so there is no central exchange) and if you take a position with a CFD you do not physically own the underlying asset. While currency prices are all driven by geopolitical events (Brexit, Coronavirus), economic data (inflation, GDP, employment) and interest rates (yields), CFDs can differ. The price oscillations of a CFD depend on the underlying instrument. For example, a CFD based on Tesla stock will depend on specific news relative to renewable energy, tweets by Elon Musk, earnings prospects, growth prospects, and the company’s regulatory environment.

CFDs vs. Futures: CFDs and futures are both derivative products, based on an underlying asset. The main differences are the contract size and margin requirements. CFDs allow more flexibility and can be traded with smaller account sizes because of the granularity of their pricing structure and leverage. CFDs are also simpler: while futures have expiry dates, CFDs do not. Also, CFDs do not require physical delivery. Imagine trading WTI Crude Oil futures and forgetting to roll the position over: you would be accountable to take physical delivery of the number of barrels you were trading. This cannot happen when trading CFDs, because you do not physically own any of the underlying asset.

CFDs vs. Commodities: CFDs trading involves “fewer headaches” than traditional commodity trading. CFD traders need not worry about physical delivery, contract expiry, or lot sizes. As such, when trading CFDs on coffee, crude oil, wheat, copper etc., you only need to focus on your pre-trade analysis, trade execution and trade management. Your trading is much more efficient and much less complex.

CFDs vs. Stocks: With physical stocks you must pay the full value upfront, whereas leverage is available on CFDs. Yet, with CFDs your losses can exceed your initial deposit, while with stocks you can only lose the invested amount. In addition, stocks have limitations on short selling, whereas CFDs allow you to trade either long or short without restrictions. Stock trading is limited to the open hours of the relevant stock exchange, while CFDs can be traded 24/7, subject to your broker’s market hours. Since there is no time-based fee incurred to keep stocks trades open, but there is a cost to holding CFDs overnight, CFDs are more directed towards intraday and swing trading, whereas stocks are more suited for long-term investing.

CFDs vs ETFs: CFDs and ETFs are both speculations on the movement of the underlying instrument. ETFs are quoted on public stock exchanges. They can represent entire sectors, industries, or commodity baskets, and as such can offer internal diversification benefits while maintaining low costs. In addition, with ETFs you must pay the full price of your underlying asset, whereas leverage is available on CFDs. ETFs are not subject to rollover fees, whereas CFDs are. As such, ETFs are best used for longer-term strategies like dollar-cost averaging, asset allocation, and risk-parity; CFDs are best used for short-term directional trading. Many Forex brokers now offer CFDs on more popular ETFs, so traders can perform ETF CFD trading.

CFDs vs Options: options are perhaps a more efficient as they have embedded leverage (1 option typically allows you to control 100 shares of a company) but the benefit might end there. Options have an expiry date and so have something in common with commodity futures, but they are certainly more complex to understand due to the multiple variables that impact their price. Also, options are almost entirely directed at stocks whereas brokers have created CFDs on many different asset classes.

How Does Online CFD Trading Work?

CFDs grant traders exposure to price action without asset ownership. Traders can benefit in either direction in a leveraged transaction, freeing up trading capital and gaining exposure to international markets with a cost-efficient and competitive product, as long as traders use it for short-term trades. CFD traders enjoy unparalleled freedom and diversification opportunities, even from smaller deposits, if proper risk management exists.

Types of CFD Brokers

CFD traders have two distinct choices:

  • Market Makers: They work with liquidity providers and match orders from their internal order book. Market Makers may also become the direct counterparty to client positions. Spreads are generally higher in a commission-free trading environment.
  • Direct Market Access (DMA) Brokers: Traders have direct access to liquidity providers via ECN and no broker intervention. Active traders get access to raw spreads for a commission. They are ideal for active traders and often come with a volume-based rebate program.

How Do CFD Brokers Make Money?

Trading costs will have the most significant direct impact on your trading strategy and portfolio. The two most significant ones consist of:

  • Spreads & Commissions: Spreads are mark-ups and translate into broker profits above market rates. Market makers derive their income primarily from them. Commissions apply at ECN brokers, where traders usually have access to raw spreads.
  • Financing & Hedging: Swap rates on leveraged overnight positions is another cost traders must consider. Hedging is another way CFD brokers make money. It is necessary to limit liabilities when clients earn profits, which remain offset by hedged positions in other markets totaling the order book.

The Best CFD Trading Platforms

The MT4, MT5, and cTrader remain among the most deployed trading platforms with full support for automated trading solutions. They are available as a desktop client, a webtrader, and a mobile app. The best CFD brokers additionally deploy proprietary trading platforms or offer upgrades to existing ones to ensure clients have an edge.

What Makes a Good CFD Broker?

While preferences among traders differ, the following deserve consideration:

  • Fee Structure: Tight spreads and low commissions with a volume-based rebate system remain the most competitive offer for active traders.
  • Products and Markets: Traders should seek a broad asset selection and competitive trading tools to gain a competitive edge. Support for third-party applications is an additional benefit.
  • Account Opening: A swift online process with mandatory account verification remains the established industry standard.
  • Deposits and Withdrawals: The best CFD Forex brokers offer low-cost and instant third-party non-banking payment processors.
  • Web Trading Platform: Proprietary trading platforms offer manual traders an excellent alternative. The best CFD brokers have APIs to allow third-party solutions access.

Final Thoughts

CFDs are a flexible, leveraged, short-term trading instrument. The benefit of CFDs is that traders can trade a vast array of different instruments via CFDs, since brokers nowadays create CFDs on practically all asset classes (stocks, forex, commodities, indices, metals, bonds). However, traders need to have a firm grasp of risk management and money management principles to properly trade CFDs while avoiding margin calls.

FAQs

Is Forex trading a CFD?

Forex trading is not CFD trading per se, but there are CFDs available to trade on currency pairs provided by CFD Forex brokers.

Why is CFD illegal?

CFD trading is legal in most parts of the world, with the US and Canada being an exception, where outdated regulation does not permit OTC products that do not pass through a regulated exchange.

How do you trade CFDs in Forex trading?

You need to have a funded account with a CFD Forex broker and trading knowledge with experience.

How do brokers make money on CFDs?

CFD brokers primarily earn money from spreads, commissions, and swap rates on leveraged overnight positions. As market makers, they also profit from client losses where they are the direct counterparty.

Are CFDs good for beginners?

CFDs are suitable for beginners who take the appropriate time to learn and understand what CFDs are and how to trade them. From an educational perspective, they are neither better nor worse than other wrappers, but they are the most efficient ways to trade financial markets.

Can CFDs be profitable?

Profitability depends on traders and their strategies, as CFDs are only a tool that allows traders to earn profits but cannot do so on their own, like other assets. CFDs, given their structure, represent the most efficient methods for traders to profit from price action.

How much money do you need to trade CFDs?

Capital requirements to trade CFDs depend on the expectations of individuals, but portfolios below $5,000 will struggle to execute a diversified trading strategy. While traders may start with notably smaller accounts, they may not warrant the efforts necessary to achieve micro-profits unless portfolio managers ignore risk management, which usually results in losses. Therefore, traders should follow a portfolio growth strategy consisting of organic growth and follow-on deposits until they have sufficient funds, often a minimum exceeding $25,000, to achieve desired portfolio performance within acceptable risk parameters.

What assets can you trade with a CFD broker?

The asset selection depends on the broker offering CFDs, but all financial instruments are available as CFDs, especially at brokers that write CFDs based on client demand.

Is CFD the same as Forex?

CFD trading brokers offer Forex trading as CFDs. While price action is identical, differences exist. CFDs are derivative contracts that mirror the underlying price moves of currency pairs, but traders do not buy physical currencies. CFDs are one way to trade Forex.

Is CFD trading real or fake?

CFD trading with regulated and trusted CFD trading brokers is legit. CFD trading is the most efficient method for traders to engage in markets, as they mirror price action 1:1 but do not grant ownership of underlying assets to CFD holders. Traders can use leverage, and CFDs never expire or have automatic rollovers, making them ideal for all trading strategies.

Why is CFD haram?

A CFD may be haram as it involves leverage, which incurs swap rates or overnight financing, making CFD trading with CFD trading brokers potentially haram.

Huzefa Hamid

I’m a trader and manage my own capital. I trade the major Forex pairs, some Futures contracts, and I rely entirely on Technical Analysis to place my trades. Today, I am also a Senior Analyst for DailyForex.com. I began trading the markets in the early 1990s, at the age of sixteen. I had a few hundred British pounds saved up (I grew up in England), with which I was able to open a small account with some help from my Dad. I started my trading journey by buying UK equities that I had read about in the business sections of newspapers. The 1990s were a bull market, so naturally, I made money. I was fortunate enough in my early twenties to have a friend that recommended a Technical Analysis course run by a British trader who emphasized raw chart analysis without indicators. Having this first-principles approach to charts influences how I trade to this day.