Best CFD Brokers and Trading Platforms for 2024

Checker: Bahaa Khateeb
Last Update: 2024-11-25

With many years of meticulous FOREX broker testing, Arincen stands out as a voice of authority. Our analyses, shaped by exhaustive data collection, are trusted by many. Each year, we gather 120 data points from more than 100 brokers. Our team of more than 20 people collaborate extensively to produce high-quality broker reviews like this one. For a detailed explanation of how we test brokers, navigate to the bottom of this article.

Contracts for Difference (CFD) are financial instruments that allow traders to profit from price movements without physically owning the underlying asset.  When you trade CFDs with the best online CFD trading platforms, you enter a contract with a CFD broker to exchange the difference in the price of an asset from the time the contract is opened until it is closed. If the price of the asset increases during the life of the contract, you will make a profit, while if the price decreases, you will incur a loss.
The act of buying and selling CFDs is both popular and risky. In this article, we will explain what CFDs are and how they work, dive into the pros and cons of trading CFDs, and demonstrate how CFDs are different from FOREX and stocks. However, for starters, our team of in-house researchers at Arincen has conducted rigorous research and testing to find the best brokers for trading CFDs. We'll tell you more about our research methodology. 

The Best CFD Brokers and Trading Platforms in 2024

With so many choices out there, it's tough to select the right broker. In this case, we've done the work for you. Here is a summary of each broker according to specific criteria, along with their pros and cons. After a stringent research exercise, we present our list of the best CFD brokers and trading apps for 2024:

  • ICM - Capital 91.10: Best Deposit and Withdrawal Broker

  • Tradeview: 90.00: Trusted broker that offers very low trading costs as well as comprehensive financial literacy materials for its clients.

  • XTB - 85.55: Best Customer Service Broker

  • IG - 85.45: Best Regulations Broker plus Convenient Platform

  • Saxo Bank - 80.09: Excellent Private Trading Platform

  • CMC Markets - 80.07: More than 9,000 Assets

  • ThinkMarkets - 80.05: Aimed at the Audience of Traders

ICM Capital

ICM Capital is considered the industry leader in deposits and withdrawals, whereby each withdrawal does not take more than five business days. Moreover, the company offers its customers a handy credit card to withdraw their profits, in addition to enabling customers to use various deposit methods. The company, which is licensed by the UK's FCA, has several branches around the world. Among other things, it has a rich portfolio of assets, especially stocks, offers a low spread, as well as the ability to use MT4.

Broker Evaluation8.11
Regulations
Minimum Deposit$500
Islamic AccountYes
Payment MethodsBank transfer, credit card, electronic payment providers, crypto
Main BranchUnited Kingdom
Customer Service24/5
Demo AccountYes
Trading PlatformsMT4, MT5, cTrader, Web Platform

Pros

  • Segregated client funds.
  • Regulated by the UK’s FCA.
  • Established in 2009.
  • More than 10,000 ICM Capital users and traders.
  • Reasonable minimum deposit from $500.
  • Decent funding options.
  • No swaps.
  • MetaTrader4 (MT4) desktop and mobile download.

Cons

  • Does not allow scalping.
  • Not ASIC-regulated.
  • Relatively limited range of instruments.
  • Slow live-chat service.
  • Relatively high trading fees.

Tradeview Markets

Tradeview Forex, interchangeably known as Tradeview Markets, was established in 2004 and is headquartered in the Cayman Islands, setting itself up as a significant player in the online FOREX and CFD trading world. Regulated by the Cayman Island Monetary Authority (CIMA) and the Malta Financial Services Authority (MFSA), Tradeview Forex is a reliable platform in a competitive market​​​​. The broker’s commitment to offering a broad and accessible trading environment shines through with its low deposit requirement and how it provides various advanced trading platforms to clientele.

Broker Evaluation7
Regulations
Minimum Deposit$450
Islamic AccountYes
Payment MethodsBank transfer, credit card, electronic payment providers, crypto
Main BranchCayman Islands
Customer Service24/5
Demo AccountYes
Trading PlatformsProprietary Platform, MT4, MT5, Web Platform

Pros

  • Established in 2004.
  • Variety of trading platforms, such as MT4, MT5, cTrader, and Currenex, catering to different trading preferences and strategies.
  • Low minimum deposits.
  • Beginners and experienced traders looking to refine their strategies.
  • Supports automated trading through the use of Expert Advisors (EA) on MT4 and MT5 platforms.
  • Decent leverage levels of 1:400 available in some jurisdictions.
  • Regulated by CIMA, MFSA, and will soon be regulated by the UK’s Financial Conduct Authority (FCA).

Cons

  • While regulated by CIMA and the MFSA, the broker is still in the final stages of becoming regulated by the tier-one FCA.
  • Trades on the Innovative Liquidity Connector® account are subject to commission charges, which may add to trading costs.
  • While offering high leverage up to 400:1 can be an advantage, it also introduces significant risks, especially for new traders.

XTB

What distinguishes XTB from other brokers is the fact that it offers the best customer experience among all the companies we have surveyed. Indeed, it boasts the fastest response rate from all the companies under investigation. This is especially relevant since the market is always on-the-go, and so you need to act fast. XTB offers lots of asset classes, as well as the ability to use the MT4 trading platform. Finally, it maintains a relatively low spread, which is suitable for quick deals.

Broker Evaluation8.55
Regulations
Minimum Deposit$500
Islamic AccountYes
Payment MethodsBank transfer, credit card, electronic payment providers
Main BranchUnited Kingdom
Customer Service24/5
Demo AccountYes
Trading PlatformsMT4, MT5, Web Platform

Pros

  • Long history of operation.
  • Globally recognized, having won multiple awards.
  • Some of the lowest FOREX spreads in the market.
  • Regulated by the FCA (UK).
  • Offers protection for client accounts.
  • Emphasis on customer service.
  • Excellent support, learning and research tools.

Cons

  • Does not accept US clients.
  • Non-FOREX spread costs are relatively high.
  • No GSLO.
  • No back-testing or automated trading capabilities.
  • Conditions vary according to regulation and entity.

IG

IG is arguably the best broker when it comes to security and trust, boasting, as it does, licenses from 10 regulatory bodies, including the all-important FCA from the UK. The company is also a bank and is a publicly traded company in London. It is known for offering more than 10,000 asset classes of currencies, commodities, future contracts, ETFs, indices, cryptocurrencies etc. Further, it has its own state-of-the-art trading platform and offers a relatively low spread.
Broker Evaluation7.54
Regulations
Minimum Deposit$250
Islamic AccountYes
Payment MethodsBank transfer, credit card, electronic payment providers
Main BranchUnited Kingdom
Customer Service24/5
Demo AccountYes
Trading PlatformsProprietary Platform, MT4, Web Platform

Pros

  • Easy-to-navigate platform that is simple for beginners to master.
  • Margin rates are easy to understand and affordable.
  • Mobile and tablet platforms offer full functionality of the desktop version.
  • Accepts US clients.
  • Access to more than 100 currency pairs
  • Emphasis on education and research.
  • Regulated by the FCA (UK), as well as the CFTC and the NFA (US).
  • Offers protection for UK/EU client accounts.

Cons

  • US traders can currently only trade FOREX.
  • No GSLO for US-based traders.
  • No account protection for US clients.
  • Relatively high share-CFD fees.
  • No copy trading or back-testing integration on IG platform.

Saxo Bank

Saxo Bank is considered one of the best investment banks in financial markets and currencies, as it offers the very best trading platform and tools from all the companies we have reviewed. Meanwhile, its spreads are very low and, as such, suitable for short-term deals; and it offers a large number of asset classes, including currencies, commodities, indices etc. Finally, its customer service is excellent and very responsive to traders' needs.

Broker Evaluation6.09
Regulations
Minimum Deposit$5000
Islamic AccountNo
Payment MethodsBank transfer, credit card
Main BranchCopenhagen, Denmark
Customer Service24/5
Demo AccountYes
Trading PlatformsSaxoTrader

Pros

  • Extensive range of offerings.
  • Regulated by the FCA (UK) and other top regulators.
  • Great trading platform.
  • Among the industry’s best research.
  • Superior user interface.
  • Offers protection for client accounts.

Cons

  • High bond, options and futures fees.
  • Confusing instrument fee structures.
  • High minimum deposit.
  • Does not accept US clients.
  • No MT4.
  • Lacks live chat.

CMC Markets

CMC Markets is a well-regarded broker offering some 9,000 asset classes that encompass currencies, commodities, indices, cryptocurrencies, bonds, and stocks. The company offers relatively low spreads, access to MT4, and fast customer service. It is most suited for traders looking for diversity in asset classes.

Broker Evaluation7.07
Regulations
Minimum Deposit$0
Islamic AccountNo
Payment MethodsBank transfer, credit card, electronic payment providers
Main BranchUnited Kingdom
Customer Service24/5
Demo AccountYes
Trading PlatformsProprietary Platform, MT4, Web Platform

Pros

  • Extensive range of offerings.
  • Regulated by the FCA (UK).
  • Low FOREX fees.
  • Emphasis on education and customer service.
  • Great Web and mobile platforms.
  • Offers protection for client accounts.
  • Research amenities are industry leading.

Cons

  • Does not accept US clients.
  • High stock CFD fees.
  • High CFD spreads for certain indices.
  • Differences between Next Generation and MT4.
  • Complicated account verification.
  • No back-testing or automated trading capabilities.

ThinkMarkets

Originally founded in New Zealand in 2010, and moving to Australia within the space of their first two years, ThinkMarkets is a global online brokerage focusing on FOREX and CFD trading. In addition to a range of major and minor currency pairs. ThinkMarkets has an array of CFDs on offer. This includes indices, as well as hard and soft commodities.

Broker Evaluation8.05
Regulations
Minimum Deposit$0
Islamic AccountYes
Payment MethodsBank transfer, credit card, electronic payment providers, crypto
Main BranchAustralia
Customer Service24/7
Demo AccountYes
Trading PlatformsProprietary Platform, Web Platform, MT4, MT5

Pros

  • Beginner assistance offered through 24/6 channels.
  • Spreads are as low as 0.0 pips.
  • 24/7 expert customer service.
  • CFD shares and indices come at no extra fee.
  • Zero broker fees for FOREX trading.
  • Technical analysis and quality market information.
  • Percentage allocation management module (PAMM) and Multi-account manager (MAM) accounts available.

Cons

  • Direct share trading is on a separate platform.
  • No binary options offered.
  • Commissions charged for two account types.
  • After a strong early start, ThinkTrader user ratings have slid to 3.4 stars.
  • No US, Canada, or Japan clients allowed.

There is a high degree of risk involved in trading securities like FOREX, or CFDs, which are highly complex instruments. As a trader, you could be exposed to excessive leverage, questionable broker tactics, market volatility, and limited regulatory protection. Despite your best trading techniques and risk management strategies, your efforts may not be profitable, and you could suffer losses.

What are CFDs?

As noted in the introduction, CFDs are tradable instruments that enable you to speculate on the underlying price of securities or assets without actually owning them. You may be wondering what it means to speculate on the underlying price. In simple terms, you are predicting the future value of an asset, and you are so sure of your prediction that you are putting your money on the table as a wager it will happen. Your broker takes your money and places the wager on your behalf. If your prediction comes true, you make money; but if it does not, you lose out. 

A CFD trade is in place after a trader has inked a contract with their broker to buy or sell a particular underlying asset or security at a specific future price, which is different from the current price. By doing so, the trader speculates on price fluctuations that may occur in the “window” of time between when the contract takes effect and when it expires (or when the trade is finally closed).

In sharp contrast to the process of purchasing asset classes such as company stock, where you become the owner of those equity shares, buying a CFD means you never own the underlying asset.

As the price of the underlying asset fluctuates, the CFD trader will experience either an unrealized profit or an unrealized loss. A CFD trader can, therefore, experience one of three scenarios. If the trade is closed while the position is still profitable, a profit will be realized. Likewise, if the trade is unprofitable when closed, the loss becomes realized. Finally, neither a profit or loss will occur if the price remains flat.

In layperson’s language, if a trader buys a CFD on the EUR/USD pair and the contract price moves higher than had been paid for initially, the unrealized profit will be the difference between those two prices, minus of course, any applicable trading costs the broker may charge.

How do CFDs Work?

CFDs are a good option if you are looking for a financial asset to trade in today's retail marketplace. It is a trading method that is supported by most brokers, and you can use them to trade FOREX, stocks, indices, commodities and cryptocurrencies

CFDs are a good trading method to use to trade with leverage as you can gain exposure to a larger position than your initial investment. Another reason they can be attractive is because CFDs typically offer lower fees and commissions compared to other forms of trading, such as futures or options. This can help you keep your costs in check.

They are flexible instruments that allow you to open and close positions at any time and use them in conjunction with a variety of trading strategies, such as scalping, day trading, or swing trading. If you are looking for a flexible, accessible and cost-effective way to trade a range of different markets and asset classes, CFDs may be for you.

In Which Countries Can You Trade CFDs?

CFD trading is perfectly legal in many markets around the world. However, not all countries treat it the same, with some implementing stricter rules than others. Certain countries restrict how much leverage brokers can offer for CFD trading. Other countries, most notably the US, have outright bans on CFD trading.
Meanwhile, some European countries have firm restrictions on CFD trading. CFD trading in Europe is regulated by the European Securities and Markets Authority (ESMA), which has imposed restrictions on the marketing and sale of CFDs to retail investors in the EU since August 2018. Leverage is tightly controlled, as we demonstrate in this article. Additionally, European brokers must be alerted to hold back from encouraging trading via bonuses and promotions, and they are obliged to post clear warnings about the dangers of CFDs, such as their high leverage, volatility, and the potential for trader losses exceeding the initial investment.

Trading with an unregulated broker can have dire consequences. Regulated brokers must comply with strict rules to protect your interests. Unregulated brokers may engage in fraudulent activities, such as misappropriating client funds, and may not have adequate measures in place to protect your data. For a list of the best regulators, read our article here.

Pros and Cons of CFD Trading

CFDs have several pros and cons, as outlined below:

Pros

  • CFD traders have a wide range of markets available to them, including instruments that might not necessarily be available in their country of residence.
  • With CFDs, you can easily go long (buy) and short (sell), freely switching between the two.
  • CFD trades, executed instantly as they are, carry less risk of slippage.
  • Compared to trading underlying shares, CFD trading platforms tend to have low trading fees and reduced commission charges.
  • Some markets have day trading minimums or place limits on the number of day trades that can be made within certain accounts. The CFD market is not bound by these restrictions.
  • CFDs provide higher leverage than traditional trading.

Cons

  • The risks associated with trading with leverage from a margin account are exponentially heightened. Indeed, it is possible to lose your entire balance or even go into the red.
  • When holding a position overnight, CFD traders carry charges that may become prohibitive.
  • With CFDs, traders are ineligible for such benefits as dividends and shareholder rights if they speculate in shares.
  • In most Western economies, CFD trades are subject to a capital gains tax.
  • Other CFD risks include weak industry regulation, potential lack of liquidity, and the need to maintain an adequate margin.

How are CFDs Different from Stocks?

This is a question that new traders often ask. When you buy stocks through an online broker, your broker holds these shares on your behalf. Being the “shareholder of record,” you gain certain rights and privileges. These range from enjoying voting rights and taking part in proxy company meetings to also becoming eligible to receive potential dividends.

While CFD traders do not enjoy any such rights, in some rare instances CFD brokers may offer traders the ability to receive dividends, akin to the trading of real (underlying) stocks.

Leverage: This is one key area where CFDs operate very differently to trading cash equities (stocks). Indeed, CFD traders can access leverage while in most cases leverage is not available when trading cash stocks

Risk: Share CFDs are much riskier than trading in traditional underlying stocks. This is partly because of the leverage often offered to CFD traders and not offered to those investing in traditional stocks. Indeed, CFD traders can see their entire balance wiped out or even go into the negative, in some cases. 

How are CFDs Different from FOREX?

FOREX is an asset class whereas CFDs are a type of instrument. Also, FOREX traders take delivery of actual assets (in this case, fiat currencies) while CFD traders speculate on price movements for a range of asset classes without taking ownership of the underlying assets. 
Under their definition of a derivative instrument that tracks the price of an underlying asset or security, CFDs are non-deliverable and are always cash-settled. This means there is no possibility for delivery of any underlying asset. 
Here is an example. A trader who purchases the EUR/USD currency pair settles the transaction in US dollars and gets euros in exchange. On the other hand, a CFD trader who buys the EUR/USD cannot take delivery of any currency and can only close the position by selling an equivalent amount of EUR/USD to exit the trade. The aim is that there is a positive difference (favoring the trader) in the value of the currency pair between the time they bought it and when they sold it
Notwithstanding, CFDs and FOREX do share some similarities, including the fact that most retail FOREX trades operate much like CFD trades in that they are cash-settled.

How to Choose the Best CFD Broker?

You cannot trade CFDs without the help of a broker. This is because brokers provide the trading platform and act as intermediaries to help you access the financial markets. The broker acts as the counterparty to the CFD trade and sets the terms of the contract. The broker oversees placing a margin requirement and how much leverage you can utilize on the trade. Remember that when trading CFDs, you must always select a reputable and regulated broker that offers a user-friendly trading platform. As always, you should be looking for competitive fees and commissions, not to mention dependable customer support.

How to Check the Regulation and Licensing of The Broker?

It is important to choose a CFD broker that is regulated by a reputable financial authority. This ensures that the broker is subject to certain rules and regulations designed to protect traders, such as maintaining sufficient capital and segregating client funds from the broker's own funds. Here are some of the best regulators in the world:

Financial Conduct Authority (FCA): The FCA is the UK's financial regulator and one of the most respected in the world. FCA-regulated brokers are required to meet stringent requirements, including holding sufficient capital, segregating client funds, and providing regular reporting.

Australian Securities and Investments Commission (ASIC): ASIC is the Australian financial regulator and is known for its tough stance on financial misconduct. ASIC-regulated brokers are required to meet similar requirements to FCA-regulated brokers.

Commodity Futures Trading Commission (CFTC): The CFTC is the US derivatives regulator and has a strong focus on protecting retail traders. 

Ensure that a reputable authority regulates your chosen broker. Brokers offering access to CFD trading must be regulated by the same regulators, regardless of the assets they offer, such as FOREX, crypto, commodities, and indices. If you want to read more about some of the best-regarded regulators, read our article on regulation here. Remember that you do not have to use a broker with international regulation if your local broker is regulated by a solid local regulator.

What Trading Platforms, Tools, and Features Should a Broker Offer?

When choosing the perfect trading platform, retail traders should consider an array of features that cater to both novice and seasoned traders alike. In our experience, MT4 has become a staple in the online trading world for its user-friendliness, speed of execution and advanced tools. This platform has been around for many years, first created as a FOREX-only trading platform that has since been expanded to offer other instruments, like stocks, indices, and commodities. In any event, whether you choose a broker with MT4, or your broker uses another platform, these are the elements of which you need to be aware:

  • Platform Accessibility is the first consideration. Whether it's web-based or a downloadable application, a top-notch trading platform should offer flexibility in terms of access.

  • Customization and User Interface. Traders need to mold the platform according to their preferences, allowing them to set up their trading environment precisely how they want. 

  • Technical Analysis Tools. The platform should be equipped with robust technical indicators to aid traders in making informed decisions.

  • Risk Management Tools are another pivotal aspect. Trading inherently comes with risks, and a high-quality platform should provide instruments that allow traders to set stop-losses, take-profits, and other crucial order types. 

  • For those new to the trading world, Performance and Reliability cannot be overlooked. Beginner traders especially need a platform that operates seamlessly with minimal downtimes or glitches. This ensures a smooth trading journey, allowing them to focus on market movements rather than technical hiccups.

  • Finally, the Learning and Support element is essential. The best brokers will offer platforms that are not only intuitive but also come with tutorials, guides, and responsive customer support to assist traders in navigating any challenges they might face.

Deposit and Withdrawals: Broker Comparison

Having access to a broker that streamlines the deposit and withdrawal process is crucial for retail traders. In such a fast-moving environment, financial fluidity is key. Opportunities can rise and fall quickly, requiring traders to act swiftly. A broker with an efficient funding process allows you to capitalize on these opportunities by quickly depositing funds to execute trades or withdrawing profits with minimal delay. Remember, a streamlined process reduces operational stress and enhances the overall trading experience, allowing you to focus more on market analysis and strategy rather than administrative hassles. 

ICM Capital
Tradeview
XTB
IG
Saxo Bank
CMC Markets
Think Markets
MethodCredit CardWire TransferSkrillNetellerCryptocurrencyPayPal
Deposit fee0$$0 + Bank commission1.9% 2.5%Unavailable3.75%
Withdrawal fee0$$151%$0Unavailable2%

What Customer Service Do You Need from a Broker?

As a retail trader, the customer service you need from a broker typically includes several key aspects:
  • Accessibility and responsiveness through multiple channels like phone, email, live chat, and social media.
  • Knowledgeable support staff with an understanding of trading platforms, market operations, and financial products.
  • Account management assistance including deposits, withdrawals, and understanding account statements.
  • Technical support related to the trading platform, troubleshooting, and features.
  • Educational resources.
  • Problem resolution such as trade execution problems.
  • Market information and tools to aid in making informed trading decisions.
  • Personalized services such as a dedicated account manager.
Remember, the quality of customer service can significantly impact your trading experience, so it's important to choose a broker that offers reliable and comprehensive support.
ICM Capital
Tradeview
XTB
IG
Saxo Bank
CMC Markets
Think Markets
EmailLive ChatPhoneWhatsApp
AvailableAvailableAvailableAvailableAvailable
Quick responseVery FastVery FastVery FastVery Fast

What Tradable Assets and Instruments Should My Broker Offer?

Retail trading offers a diverse range of financial instruments, each with its own set of opportunities and challenges. Here are the most common tradable assets and instruments:
  • FOREX
With the largest trading volume globally, the FOREX market allows traders to speculate on the future movements of currency prices, trading pairs like EUR/USD, GBP/JPY, and many more.
  • Commodities
Whether it's precious metals like gold and silver, or energy commodities like oil and natural gas, commodities trading offers a chance to profit from the tangible assets that drive global economies.
  • CFDs
CFD trading allows you to speculate on the rising or falling prices of fast-moving global financial markets, such as shares, indices, commodities, currencies, and treasuries. You don’t own the underlying asset and you can go short or long. CFDs are traded on margin, meaning the broker allows investors to borrow money to increase leverage or the size of the position to amplify gains. Brokers will require traders to maintain specific account balances before they allow this type of transaction. CFD brokers typically provide a wide range of financial instruments across different asset classes, allowing traders to diversify their portfolios with ease.
  • Equities or Stocks
These represent ownership in a company and constitute one of the most popular avenues for retail traders, given their potential for substantial returns and the thrill of being a part of the corporate world.
  • Indices
These are baskets of stocks representing a particular market or sector, like the S&P 500 or the Nasdaq, giving traders exposure to broader market movements.
  • Cryptocurrencies
Digital coins like Bitcoin, Ethereum, and countless altcoins offer both high rewards and volatility.
  • Bonds
These debt securities offer periodic interest to holders and return the principal amount at maturity. Bonds are best for those interested in fixed returns.
  • Options and Futures
These derivative products allow traders to hedge against potential losses or speculate on price movements without owning the underlying asset.
BrokersCurrency pairsStocksIndicesCommoditiesCryptoETFs
ICM Capital 67 Pairs89 Shares17 Indices12 Commodity6 CoinsUnavailable
Tradview80 Pairs5000 Shares10 Indices10 Commodity30 CoinsUnavailable
XTB57 Pairs1848 Shares36 Indices22 Commodity22 Coins135 ETFs
IG 81 Pairs21714 Shares49 Indices39 Commodity11 Coins12858 ETFs
Saxo Bank 320 Pairs22000 Shares49 Indices39 Commodity9 Coins6700 ETFs
CMC Markets330 Pairs8000 Shares80 Indices100 Commodity18 Coins 200 ETFs
Think Markets46 Pairs 3750 Shares15 Indices11 Commodity21 Coins 350 ETFs

How Do Commissions and Fees Impact CFD Traders?

Trading fees can sometimes be hard to understand. Be sure to check how these fees compare with industry standards:
Spreads:
There are two main kinds of spread, one is fixed and the other is variable. Generally, the spread refers to the gap between two prices, such as the bid/ask rate in a currency exchange rate. If you are getting a spread of 1.4 pips for the EUR/USD, you can rest easy that you are getting a good deal at present market rates. The narrower the better, this means that a spread of 1.4 pips is better than a spread of 2 pips. This article explains more about this important concept.
Commission:
A fee charged per trade, usually calculated as a percentage of the trade value.
Rollover Fees:
Charged when you hold a position overnight. This is because they assume the risk of the market changing adversely.
Withdrawal and Deposit Fees:
Fees for transferring funds to and from your broker account.
Subscription or Inactivity Fees:
Some brokers charge a monthly fee or inactivity fee if you don't meet certain trading requirements.
Conversion Fees:
These are for trading in a different currency.
Guaranteed Stop-Loss Fees:
This is for protecting against losses.

To keep track of trading fees, make sure you research different brokers and trading platforms, as well as compare the charges of each platform. Remember that trading fees can have a significant impact on your trading profits, so it's important to choose a platform that offers competitive fees and suits your trading needs.

ICM Capital
Tradeview
XTB
IG
Saxo Bank
CMC Markets
Think Markets
SpreadCommission SwapIslamic Account
CurrenciesStarting from 1.3 Pips0$NoAvailable
StocksStarting from 18 Pips0$YesUnavailable
CommoditiesStarting from 2.3 Pips0$NoAvailable
IndicesStarting from 4 Pips0$YesUnavailable

Can CFD Trading be Profitable?

The quick answer is yes, it is possible. The longer answer, however, is that most CFD traders will end up losing money each year. Some studies warn that upward of 70% of retail CFD accounts lose money every year with that number climbing above 80% in more extreme cases.
Successful CFD traders can show a profit over a large volume of trade, over long periods. They do this by incorporating trading styles that minimize risk on the one hand, and strategies that aim to keep their average losses low relative to their average profits (though this is not always easy to achieve) on the other.

Choose a broker under the watch of a trusted regulatory authority who is renowned for their rigorous oversight. There's no obligation to opt for an overseas regulator; reputable brokers also operate within your own jurisdiction. To confirm if your broker is registered with a regulator, navigate to the regulator’s official website.

How Does Leverage & Stop Out Affect Me as a CFD Trader?

In CFD trading, leverage and stop outs fundamentally shape the risk-reward landscape for traders like you. Leverage, is essentially a loan provided by the broker, allowing you to control large positions with a relatively small amount of capital, amplifying both potential profits and losses.
On the other hand, stop outs act as a crucial risk management mechanism. When your account equity falls below a certain percentage of the margin required to hold your positions, a stop out occurs, automatically closing positions to prevent further losses. This prevents your losses from spiralling out of control. We'll explain more about the delicate balance between high rewards and risk control in leveraged trading.

Leverage

Different regulators have different guiding policies relative to leverage. Key regulators have implemented specific rules to limit the leverage offered to retail traders as a means of consumer protection.

Here are selected leverage rules for CFDs according to some key regulators:

European Securities and Markets Authority (ESMA)

ESMA caps the leverage for CFDs of major currency pairs in FOREX trading at 30:1. This means that traders need to have a minimum of 5% margin of the total trade value.

CFTC

In the United States, CFD trading isn't permitted for retail traders. However, for related products, like futures, there are specific margin requirements set by exchanges and overseen by the CFTC.

ASIC

ASIC has recently implemented rules capping the leverage for CFDs of major currency pairs for retail traders at 30:1, aligning with ESMA's restrictions.

FCA

The FCA has adopted rules like ESMA, capping leverage for CFDs of major currency pairs at 30:1 for retail traders.

As we can see, responsible regulators closely monitor leverage levels. Leverage is a double-edged sword because you can make a lot of money, but you can just as easily become financially ruined!

Similarly with stop outs, many major regulators offer negative balance protection. This is important as your open positions are automatically closed by the broker due to insufficient margin in the account. This mechanism protects you from accruing negative balances and owing money to the broker.

Retail traders should be cautious when trading with high leverage due to the significant risks involved. While leverage can increase gains, it can also magnify losses. You should be careful when trading with high leverage, that’s why you need the right knowledge and experience to handle the highs and lows that come with this form of trading.

Stop Out

The term "stop out" refers to a situation where a broker automatically closes some or all of your open positions to prevent your account from going into a negative balance. This is most relevant for traders using leverage. The stop-out level is typically expressed as a percentage, representing the margin level at which the broker starts to close out open trades.
0% Stop-Out Level:
At this level, when the margin level of the account drops to 0%, the broker will automatically close all open positions. This is the most aggressive stop out level. As soon as the equity in the account equals the required margin, the positions are liquidated. This gives no room for your positions to recover even if the market turns in your favor immediately after reaching this level.
50% Stop-Out Level:
Here, if the margin level drops to 50%, the broker will start closing out positions.
It offers a bit more flexibility when compared to the 0% level. The broker will typically close the most unprofitable positions first, and if that's not enough to bring the margin level back above 50%, more positions will be closed until it's achieved.
100% Stop-Out Level:
A 100% stop out level means that when a trader's equity equals the margin required for the open positions, the broker will start closing those positions. It’s important to know that this is similar to the 0% level but might be worded differently, based on broker terminology.
In any case, the specific percentage and the order in which positions are closed can vary among brokers, so it's essential for traders to be aware of their broker's policy on stop-out levels.
It's worth noting that while stop-out procedures are meant to protect traders from negative balances, they can lead to significant losses in volatile markets if positions are closed automatically, especially if the market quickly reverses after the stop out. As such, using protective measures like stop-loss orders and not over-leveraging is always a good ploy.

Is CFD Trading a Good Idea for Beginners?

No, it is not. CFDs are better suited to experienced traders because of the extra risks that come with trading with leverage from a margin account. For beginner traders, trading with leverage can increase the risk/reward potential for their investment capital and can even result in zero or a negative balance (in rare cases). However, if you already have experience with traditional investments, like stocks or Exchange Traded Funds (ETF), and you want to learn how to trade from a margin account, a demo account can be the best way to go. Demo accounts allow traders to use virtual funds in contrast to a live account where you fund the account with real money.

Tip: Invest in Your knowledge
For every aspiring retail trader, knowledge is key to a successful trading journey. We invite you to delve into Arincen's goldmine of insights, strategies, and expert analyses. Whether you're just embarking on your trading venture or trying to level up your trading game, our resources are designed to give you all the information you need. Visit our educational resources here.

Which Broker Offers the Most CFDs?

Our research has shown that IG offers the most CFDs, with an impressive range of CFDs and other tradable instruments across a wide array of asset classes. These include FOREX, cash equities, options, and exchange-traded securities, just to name a few of the instruments available to traders at IG.

Which CFD Broker Charges the Lowest Fees?

Typically, CFD brokers that charge the lowest fees are those that also levy the lowest effective spreads, determined simply by calculating the broker’s average spreads, and then factoring in any per-trade commissions. In 2024, our research found that Tickmill reigned supreme in this category, with the lowest effective spreads out of our list of the best brokers in the industry.

Conclusion

The debate over the concept and use of CFDs continues to rage in financial circles. Unlike investing in stocks or FOREX, CFDs have no value rather than allowing users to speculate on prices of the underlying assets. While CFDs are generally better suited for experienced traders, due mainly to the risks that come with leveraged trading, they are in some respects much easier and more flexible than trading stocks, FOREX and commodities outright. After all, a CFD trading account is still the best way for traders to get access to nearly all financial markets and the most financial assets in global markets.
When compared to other forms of trading, some of the benefits of CFD trading include low minimum deposit, high leverage ratio, low trading costs and the ability to take long and short positions without having to adhere to strict margin requirements. So, if you are planning to get access to some of the best online CFD trading platforms, the list of brokers we presented in this article can be very useful.

Methodology

The team at Arincen collected more than 120 pieces of data covering more than 100 licensed FOREX companies. Data collection was done in three ways:

  1. Companies’ websites.

  2. Other websites that have ranked FOREX companies.

  3. A survey questionnaire (referred to here as Survey “1”) was sent to the companies invited to participate in the exercise.

We have identified 12 criteria for our assessment, each containing several aspects and carrying its relative weight. These include licensing, deposits and withdrawals, number of assets etc.

Afterwards, we validated the data by:

  1. Registering with FOREX companies as a secret shopper and/or as Arincen.

  2. Survey number “2,” in which we asked these companies’ customers for important feedback and experience. 

The next step saw us evaluate and rank each company, relying on the hard work of 15 Arincen employees. We were very careful in ensuring the most accurate assessment possible, including taking into account different languages, as well as the various mobile-app operating systems, e.g., Apple, Samsung etc.

To add credibility to our research project, we sent a final and third survey (referred to here as Survey “3”) to enable participating FOREX companies to evaluate our research and whether it accurately reflects the realities on the ground. We were fortunate enough to receive a mark of 9.9 out of 10! We have kept to a minimum the margin of error, which stood at a measly 1%. To learn more about how we came up with the evaluation, please click here.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

FAQ

Is CFD trading taxable around the world?

You can trade CFDs in stocks, commodities, or FOREX. The profits from CFD trading are treated as regular profits from any other financial asset. Their treatment varies greatly from country to country and depends on local tax laws and regulations. It is always a good idea to contact a tax expert in your country to fully understand your tax liability. However, in general, many countries consider profits from CFD trading either as capital gains or income, depending on factors such as the frequency of trading, the purpose of the trading activity, and other circumstances.

What are CFDs?

CFDs are financial instruments that allow traders to speculate on the rising or falling prices of underlying assets without actually owning the assets themselves. A trader can initiate a contract with a broker to exchange the price difference of an underlying asset at a time in the future. In other words, the trader does not own the asset outright, but signs an agreement with a broker that on a defined date in the future, if the asset in question has lost or gained value in any direction, either the broker pays the trader, or the trader pays the broker. It takes a great deal of skill for the average trader to predict with any reliability how respective currencies, stocks or commodities will change in value over time, making CFD trading a highly risky business.

Can CFD trading be profitable?

Yes, CFD trading can be profitable and some investors can reap handsome profits when trading these financial products. However, all this comes at a cost as the oft-leveraged CFDs are very risky instruments. Leverage refers to the loan extended by the broker, which allows the trader to invest a much larger amount of money than they actually own. With over three quarters of retail trading accounts losing money when trading CFDs, these instruments are by no means a guarantee for getting rich over night.

Are CFDs good for beginners?

CFDs are high-risk instruments and are, therefore, not recommended for beginners. CFDs are very risky because they are leveraged products. Leverage in this case means that you trade with your own money plus the funds your broker lends you. While you can open much larger positions this way, you can magnify both your profits and your losses. CFDs are widely used by experienced traders with a deep understanding of financial markets and investment strategies. As we had argued earlier in the article, for absolute beginners, it makes more sense to open a CFD trade demo account.

What to look for in a CFD broker?

As you narrow the list of CFD brokers from which you want to choose, it is important to consider several factors, ranging from regulation, costs, and tradable asset classes to the trading platforms available. A well-regulated broker ensures the safety of your funds from internal company fraud or bankruptcy. Always look out for brokers that are regulated by tier-1 watchdogs.
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