We found 11 online brokers that are appropriate for Trading CFD.
Leverage enables a trader to get a larger exposure and magnify potential profit. CFD or Contract for Difference is a leveraged product under which a small percentage of capital, something like 5% or 10%, is required to open a position.
There are more advantages than disadvantages in CFD leverage. The important cons to mention here is that the possible loss is also magnified. However, there are methods to minimize the losses. A proper risk-management tool can help to earn more and lose less.
Before we discuss, it is important to know that leverage is a key feature of the instrument. It works by using margin money, which is the minimum deposit required to open a position. The level of margin reciprocates the level of exposure. If it is less, the exposure is more. The total exposure compared to the margin deposit is called the leverage ratio.
Suppose a trader buys 1,000 shares of ABC Company at the rate of 100p for each share. The total exposure here is £1,000 without considering the commission, fee, or other charges. Now, if the price of ABC Company's share rises to 120p and the position is closed, a profit of £200 is made.
If the market turns unfavorable and the prices drop to £80p, the trader loses £200, or 1/5th of the paid amount.
If the trader has opened his position with leverage of 90%, he needs to pay just 10% of the total trade size. This means his deposit would be just £100.
If the prices go up by 20p, the profit is £200. This means the profit is the same but the initial deposit is low.
If the prices slash down by 20p, the trader losses the same £200 and this is double the initial capital of £100. So, the losses may go beyond the margin.
Leverage is a powerful trading tool and below are some of the benefits explained:
Just a fraction of the deposit is required to open a position of several folds more of trade size. He receives similar profits to what conventional trading gets. The profits in both cases are calculated by using the complete value of the trade position.
With the use of CFD leverage a trader can invest the excess capital to other financial instruments. This is known as gearing.
With CFD leverage a trader speculates on the price movements of the underlying assets which are either rising or falling. This is called going short.
Trading hours are different for each country or each market on the Global platform and hence the trading is allowed around the clock.
CFD leverage offers benefits as well as drawbacks. We have looked at the advantage part and here some cons discussed:
Magnified Losses are similar to magnified profits a trader can also suffer magnified losses as the margin deposit is very low, somewhere like 5% or 10%. Hence, steps need to be taken to minimize the loss risk.
With No Shareholder Privileges, it is different from holding shares in which a trader receives dividends. In CFD leverage the profits or losses will be added or withdrawn from the trading account.
With margin calls if the position moves against the trader, the service provider can ask to add up some more funds to the account to keep the position open or else to exit positions. This is called a margin call.
Funding Charges refers too CFD leverage if a trader holds the position overnight, which means beyond the trading hours, the brokerage agency charges a fee.
CFD leverage is risky and may cause losses. To minimize the losses a trader can use risk-management tools. A few are discussed below:
A trader can attach stop to restrict loss if the price goes beyond the move. However, sometimes it fails if the market moves quickly. The stop may not trigger at the right price.
Guaranteed Stops are similar to Stops but fills at the level a trader has set, even if slippage or gapping occurs.
With a Limited-Risk account the stop is guaranteed and so the market risk is very low.
CFD leverage is good as well as bad. It has pros as well as cons. It can magnify profits several folds due to it being a margin leveraged trade, this can also magnify losses by several folds with respect to your deposited amount.
The loss may sometimes be more than the deposit. Hence, it is not everyone’s cup of tea. Nevertheless, it is one of the best methods to profit with very low investment. It is the best to open a position with little money and have the potential of making leveraged profits. Just take the time to understand all of the risks with CFD trading and mitigate all of your risks just as you should with all investing.
If you are researching CFDs make sure to read through the below CFD related guides. You will find something useful.
We've collected thousands of datapoints and written a guide to help you find the best Cfd Leverage for you. We hope this guide helps you find a reputable broker that matches what you need. We list the what we think are the best CFD brokers below. You can go straight to the broker list here.
There are a number of important factors to consider when picking an online CFD trading brokerage.
Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.
We compare these features to make it easier for you to make a more informed choice.
Here are the top CFD Brokers.
Compare CFD Brokers min deposits, regulation, headquarters, benefits, funding methods and fees side by side.
All brokers below are CFD brokers. Learn more about what they offer below.
You can scroll left and right on the comparison table below to see more CFD brokers that accept CFD clients
Broker |
eToro
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IC Markets
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XTB
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FP Markets
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Roboforex
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Trading212
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Plus500
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Pepperstone
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EasyMarkets
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XM
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FXPrimus
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Rating | |||||||||||
Regulation | Financial Conduct Authority (FCA), Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID), Australian Securities and Investments Commission (ASIC) | Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), FCA number FRN 522157, Cyprus Securities and Exchange Commission (CySEC), CySEC Licence Number: 169/12, Comisión Nacional del Mercado de Valores, Komisja Nadzoru Finansowego, Belize International Financial Services Commission (IFSC) under license number IFSC/60/413/TS/19, Polish Securities and Exchange Commission (KPWiG) | Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) | Cyprus Securities and Exchange Commission (CySEC) | Financial Conduct Authority (FCA), Financial Supervision Commission (FSC) | Plus500UK Ltd authorized & regulated by the FCA (#509909), Plus500CY Ltd authorized & regulated by CySEC (#250/14), Plus500AU Pty Ltd (ACN 153301681), ASIC in Australia AFSL #417727, FMA in New Zealand, FSP #486026 and Authorised Financial Services Provider in South Africa FSP #47546 | Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Federal Financial Supervisory Authority (BaFin), Dubai Financial Services Authority (DFSA), Capital Markets Authority of Kenya (CMA), Pepperstone Markets Limited is incorporated in The Bahamas (number 177174 B), Licensed by the Securities Commission of the Bahamas (SCB) number SIA-F217 | Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | International Financial Services Commission (IFSC), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC) | Cyprus Securities and Exchange Commission (CySEC), Markets In Financial Instruments Directive (MiFID) |
Min Deposit | 200 | 200 | No minimum deposit | 100 | 1 | 1 | 100 | 200 | 100 | 5 | 100 |
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Used By | 17,000,000+ | 60,000+ | 250,000+ | 10,000+ | 10,000+ | 14,000,000+ | 15,500+ | 10,000+ | 142,500+ | 70,000+ | 10,000+ |
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Platforms | Web Trader, Tablet & Mobile apps | MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac | MT4, Mirror Trader, Web Trader, Tablet & Mobile apps | MT4, MT5, IRESS, Mac, Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, Web Trader, cTrader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, ZuluTrade, Web Trader, cTrader, Tablet & Mobile apps | MT4, Web Trader, Tablet & Mobile apps | MT4, MT5, Mac, Web Trader, Tablet & Mobile apps | MT4, Mac, Mirror Trader, Web Trader, Tablet & Mobile apps |
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Up with fxprimus |
Risk Warning | 71% of retail investor accounts lose money when trading CFDs with this provider. | Losses can exceed deposits | 82% 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. | Losses can exceed deposits | Losses can exceed deposits | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% 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. | 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.3% 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 | Your capital is at risk | Your capital is at risk | Losses can exceed deposits |
Demo |
eToro Demo |
IC Markets Demo |
XTB Demo |
FP Markets Demo |
Roboforex Demo |
Trading 212 Demo |
Plus500 Demo |
Pepperstone Demo |
easyMarkets Demo |
XM Demo |
FXPrimus Demo |
Excluded Countries | IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, ZW, ET, GH, TZ, LY, UG, ZM, BW, RW, TN, SO, NA, TG, SL, LR, GM, DJ, CI, PK, BN, TW, WS, NP, SG, VI, TM, TJ, UZ, LK, TT, HT, MM, BT, MH, MV, KZ, GD, FJ, BB, BM, BS, AG, AI, AW, LB, SV, US, PY, HN, GT, PR, NI, VG, AN, | AF, GN, SL, BW, IR, SY, MM, IQ, TG, KH, LS, YE, CI , LR, ZW, CU, LY, TZ, CG, ML, BO, LR, NE, AO, GM, NG, AG, GH, KR, KG, GN, SN, NA | US, IN, PK, BD, NG , ID, BE | US, JP, NZ | US, JP | US | MY, BE, US, CA, CN, ID, PH, TG, NG, DO, MA, ZW, PR, TZ, TN, UG, BW, AO, AE | BR, KR, IR, IQ, SY, JP, US | US | US, CA, IL, KR, IR, MM, CU, SD, SY | AF, CI, CU, IQ, IR, LY, MM, KR, SD, PR, US, AU, SY, DZ, JP, EC. |
You can compare CFD Brokers ratings, min deposits what the the broker offers, funding methods, platforms, spread types, customer support options, regulation and account types side by side.
We also have an indepth Top CFD Brokers for 2021 article further below. You can see it now by clicking here
We have listed top CFD brokers below.