11 Best CFD Trading Brokers – with Comparing Guide: (CFD – Contract for Difference): The simple the above terminology sounds, the more complicated it is. For a beginner in online trading, it might become challenging to understand CFD clearly. If you want to get deep into CFD and know everything about it, then please click here.
CFD (contract for difference) is a contract between two parties that provides traders with a chance to earn from the price movements of the assets. The main catch here is one need not own the underlying asset in it; instead, the trader speculates over the prices of different financial instruments. CFDs work with shares, indices, forex, and commodities.
This popular derivative product offers a trader high leverage, which means the assets can be traded through a small margin only. This popular trading method has gained popularity in the last few years because of various benefits.
Now, for those who are a little confused or want to know how CFD works! Here is a good example!
How Does CFD Work?
Suppose a share is trading at the price of $100/120 (Bid/Ask Price); you decide to trade through CFD. So, you need to buy the share at an asking price of $120. Suppose you want to buy 100 shares. Simple trading would require you to pay $100×100 = $10,000. But, in CFD trading, you just need to pay a certain margin percentage (suppose 2% in this case) of the total trade. Thus, instead of $10,000, you just need to pay $200. Sounds amazing? We would say read the full example first.
Now, if the prices went up by 20% and start trading at $120/$144, then you can open your financial assets for trade and earn huge profits by just paying a small margin. But, what if the prices went down? Yes, the losses would also be huge here. Because the probability of winning is uncertain, and as it maximizes the profits with just a small amount, it also can do the same with losses.
Does it still sound impressive?
Okay! So, this was an example to help you understand CFD. Now, let us move to our main section of this write-up, i.e. nine best CFD trading platforms of all time.
9 All-Time Best CFD Trading Platforms
Based in Australia, but very well established in the UK. Pepperstone is a well known FCA regulated CFD broker in the UK and provides one of the best CFD trading services, until today.
Comparing Pepperstone to other brokers, it might not be able to offer you more number of assets than its counterparts. However, it compensates this drawback by providing a high liquidity ratio of 500:1 to its traders. Isn’t that amazing?
With just a minimum deposit amount of $200, you can sign up for a standard or razor account, as per your needs.
Probably one of the most reputed CFD brokers we have in the list. XTB is based in London and Warsaw both and is a worldwide established CFD as well as Forex broker. This giant is not only regulated by the UK’s FCA and Polish financial service authority but also on the Warsaw stock exchange.
Thus, you don’t need to worry about the authenticity or the security of your money with XTB. And this fantastic broker doesn’t just end here; it has one of the lowest CFD trading fees with an excellent user interface.
Get yourself registered now!
3. City Index
Working for more than three decades, City Index is also a well-established name in the trading market. City Index is the branding name of finance company GAIN capital, which is a New York stock exchange-listed firm. Apart from this, it regulates under the financial authorities of Singapore, UK, Australia, and many more. Thus, the concern for security and safety would eradicate here.
Talking about pros and cons, City Index doesn’t have an appealing, user-friendly desktop platform and also has a limited number of instruments for trading. However, various research tools, low trading fees, and easy account opening procedure are some of the advantages you will get with City Index.
If you are one who was looking for a broker with a plethora of assets and instruments, then XM is for you. With more than 1000 assets on their list, it is leading the broker’s chart today. Their assets list includes currencies, commodities, stocks, energies, and a lot more. So, it is an excellent option to diversify your portfolio. And it doesn’t just end here; XM also claims that “their 99.35% of all trades implement in less than a second.” Want more?
With XM you can start your trading account with just a minimum deposit of $5.
Talking about trading brokers and IG doesn’t come in the list, that’s quite difficult. IG claims that it is one of the largest CFD traders in the world in terms of revenue, and also has access to over 16000+ markets, which is impressive. Now coming to safety & security, then there’s nothing safer than this platform. It is licensed by a plethora of financial authorities and a member of NFA too.
Based in London, UK, it offers instrument trading in cryptocurrencies, forex, shares, indices, ETFs, and a lot more.
Working for more than three decades, this is also a multi-asset brokerage giant. It is not only a good option for CFD but also is excellent for spread betting, forex, indices, treasuries, etc. Why should it be on your list? Their in-house market analyses team will help you understand and examine news and events. FCA regulated, London stock exchange-listed, 9000+ asset trading options, different accounts at one time, etc. are only some of the features!
7. Plus 500
One of the leading CFD traders, maybe because of its low brokerage fees. You will also get a free demo trading account to ace your skills. The Israel based organization is well-established in the UK and regulated by FCA. But, other than CFD, you will not get the option for direct forex trading here. However, CFD is supported for 2000+ instruments, including stocks, commodities, forex, etc.
For a beginner CFD trader, it can be a viable option as there is no commission and shallow charges for trading.
Something Extra: Plus 500 is also a big sponsor of Atletico Madrid in La Liga.
Now, here comes the most innovative CFD trader on our list. FxPro is the first broker to provide a C-trading platform to users. And don’t worry about the authenticity, because it also bagged the award for “Most Trusted Forex Brand UK 2017.” Easy and fast trades and a plethora of options to trade CFDs including energies, metals, futures, commodities, etc. And not just this, you just need to deposit a minimum $100 to trade, and you’ll get access to their analysis tools too.
ActivTrades can be the best CFD trading platform for small and medium traders. These kinds of traders require a higher degree of control and less trading cost.
ActivTrades is a well-known institution in this regard. Its services include high flexibility, low swapping fees, no extra costs, and option to trade micro-lots too. Not only this, but it was also awarded, “Best Online Trading Service” in 2018. And yes, it is also regulated by FCA.
So, this was the list of best CFD brokers in the UK. These brokers are shortlisted by experts and are all genuine and authentic. But, just knowing the names of brokers is not enough. We need to compare all of them and decide which one is best for us. Therefore, below is a 7 point list on comparing criteria for CFD traders. Consider each one of them while choosing your desired broker.
How to Compare Brokers?
Spread / Commission: It is the difference between the selling and buying price of the asset. The lesser it is, the profitable it is for you.
Leverage: Leverage is the facility that allows a trader to transact a significant amount of deals by paying smaller margins. High ratio provides high profits as well as high losses. Choose wisely here.
Deposit and Withdrawal options: Deposit and withdrawal options should be vast in number. Your desired payment option should also be available at a reasonable cost.
Support: The customer support team should be responsive and quick; otherwise, it can create a lot of chaos.
Education: In addition to trading, a broker also should make you aware of different trading strategies through video tutorials and articles.
Regulation: A broker needs to be regulated by financial authorities of different countries. It denotes the authenticity and trustworthiness of the broker.
Mobile App: If your broker has a mobile application for trading, then it becomes much more comfortable and convenient to trade.
Compare the brokers on these points and choose as per your requirements. If you have some other criteria in your mind, just let us know in the comment section. Now, time to wrap it up all.
Today, we have a plethora of CFD trading brokers offering many lucrative services. These brokers differ by the number of instruments and types of CFDs available with them for trading. But, people should not fall into these lucrative prey. Instead, the safety, security, and privacy should be on top of people’s requirement list. The comparing guide will help you immensely in this. Remember, CFDs essence lies in their margin trading advantage. Thus, analyzing the margin options is essential. Apart from all of that, a good CFD broker has access to different markets, offers vast trading tools, and is open to trading strategies.
But, For now,
Have a Nice Day!