We found 11 online brokers that are appropriate for Trading CFD.
CFDs (Contracts for Difference) and ETFs (Exchange-Traded Funds) are popular investment tools. CFDs are derivatives that allow traders to speculate on price movements of assets without owning them, offering leverage but higher risk. ETFs are funds that track indices, commodities, or sectors, offering diversified, lower-risk investments as they represent actual ownership of assets.
CFDs suit short-term, high-risk trading strategies, while ETFs are better for long-term, low-risk investing. Beginners should consider their risk tolerance, investment horizon, and market knowledge when choosing between CFDs and ETFs.
Choosing between CFDs and ETFs can be confusing for new investors. Both offer access to various markets, but they have key differences in terms of risk, ownership, and cost. This guide will break down CFDs vs ETFs to help you decide which is right for your investment goals.
As an experienced CFD trader, I often get asked about the differences between CFD and ETF trading. Both have their unique characteristics and can be suitable for different trading strategies and investment goals. Let's delve into the specifics.
Contracts for Difference, or CFDs, use very risky leverage to trade on up or down price only of financial assets against your CFD broker. This means you can trade on margin and leverage, which can amplify both gains and losses. The flexibility in CFD trading strategies makes it attractive for short-term traders looking to capitalize on market volatility. For more insights on how to develop effective strategies, check out CFD Trading Strategies.
On the other hand, ETFs, or Exchange-Traded Funds, are investment funds that track the performance of a specific index, sector, commodity, or other assets. ETFs trade on stock exchanges, making them easy to buy and sell. They are generally considered lower risk compared to CFDs because they are not leveraged products. This makes ETFs suitable for long-term investors who seek steady growth and diversification.
One of the key differences between CFDs and ETFs is the use of leverage. CFDs offer leverage trading ranging from 1:10 to 1:30 under FCA regulation, allowing greater exposure against your broker than your deposited capital. However, this also means a higher risk of significant losses. To understand more about how leverage works in CFD trading, you can refer to CFD Leverage.
When it comes to returns, CFDs can potentially offer higher returns due to the leverage effect. However, this comes with higher risk, and it's crucial to have a solid risk management strategy. For average returns and how they compare, see Average CFD Return. ETFs, being less risky, generally offer more stable returns over the long term.
Feature | CFDs | ETFs |
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Definition | CFDs (Contracts for Difference) let you trade on the price changes of an asset without actually owning it. | ETFs (Exchange-Traded Funds) are funds that hold various assets like stocks or bonds and are traded on stock exchanges. |
Ownership | With CFDs, you don’t own the asset; you own a contract that reflects its price movements. | When you buy an ETF, you own shares of the fund, which in turn owns the assets it represents. |
Leverage | CFDs offer high leverage, meaning you can control a big trade with a small amount of money. Be cautious, as this also means higher risk. | ETFs generally offer lower leverage. Some special ETFs are leveraged, but they are less common and still safer than CFDs. |
Trading Hours | CFDs can often be traded almost around the clock, depending on the market and broker. | ETFs are traded during the normal trading hours of the stock exchange where they are listed. |
Costs | When trading CFDs, you’ll encounter costs like spreads (the difference between buying and selling prices), commissions, and overnight financing fees. | ETFs come with management fees, expense ratios, and brokerage commissions, but these are generally lower and more transparent. |
Market Exposure | CFDs allow you to trade in a wide range of markets, including stocks, indices, commodities, and currencies. | ETFs provide exposure to specific indexes, sectors, commodities, or asset classes, depending on what the fund tracks. |
Regulation | CFDs are less regulated than traditional financial products, and the level of regulation can vary by country and broker. | ETFs are highly regulated, typically by financial authorities such as the SEC in the US, ensuring a higher level of investor protection. |
Risk | CFDs are high-risk due to leverage and market volatility, meaning you can lose a lot of money quickly if the market moves against you. | ETFs are generally less risky than CFDs. The risk level depends on the assets the ETF holds and the market conditions. |
Liquidity | CFDs are usually quite liquid, but this can depend on the specific asset and market conditions. | ETFs are very liquid, especially those tracking major indices or popular sectors, making it easy to buy and sell them. |
Suitability | CFDs are better suited for experienced traders who understand the risks and can handle higher volatility. | ETFs are suitable for a broad range of investors, including those looking for long-term growth or income with lower risk. |
When trading CFDs, the trader makes a deal with a broker to exchange the difference in the value of an asset from the time the contract is opened to the time it is closed. This means that if the asset's price moves in the trader's favor, they will profit, but if it moves against them, they will incur a loss.
CFDs can be used to trade a wide range of assets, including stocks, indices, commodities, currencies, and cryptocurrencies. One of the main attractions of CFDs is the leverage they offer. Leverage allows traders to have a large position although they are using a small portion of their own capital, potentially amplifying both gains and losses. For example, a leverage ratio of 10:1 means that for every invested, the trader can control worth of the asset.
However, the use of leverage also significantly increases the risk. Small market movements can lead to substantial losses, potentially exceeding the initial investment. CFDs are typically used for short-term trading strategies due to the costs associated with holding positions overnight, such as overnight financing fees. Additionally, CFD trading often involves higher spreads compared to traditional trading.
CFD trading requires a deep understanding of the market, risk management strategies, and careful consideration of the potential for rapid and significant financial losses. As such, it is generally more suited for experienced traders rather than beginners.
ETFs are investment funds available on stock exchanges. ETFs track the performance of a specific index, commodity, sector, or other asset.
ETFs offer several benefits, including:
Diversification: ETFs typically hold a wide range of securities, reducing the risk associated with investing in individual stocks or assets. This diversification helps spread risk across various investments.
Liquidity: ETFs are traded on major stock exchanges, meaning they can be bought and sold throughout the trading day at market prices. This liquidity allows investors to enter and exit positions easily.
Lower Costs: ETFs generally have lower expense ratios. This is contrary to mutual funds because they are passively managed, tracking an index rather than relying on active management. Additionally, trading ETFs incurs lower transaction costs.
Transparency: ETFs disclose their holdings regularly, allowing investors a great degree of transparency. This transparency helps investors make informed decisions.
Flexibility: Investors can use ETFs to implement various investment strategies, such as hedging, gaining exposure to specific sectors or markets, and achieving long-term growth.
Below are the similarities between CFDs and ETFs:
Both CFDs and Exchange Traded Funds let you use leverage and trade on margin. With CFDs, your broker offers the leverage. In both circumstances, leverage helps magnify your profits and losses. In some instances, you might even exceed your invested funds.
When it comes to trading CFDs and ETFs, experienced traders can trade a diverse variety of financial markets.
This includes currencies, commodities, indices, and multiple stocks. Traders can find distinctive ETFs for specific countries, asset classes, economic sectors, and geographical locations.
Both ETFs and CFDs incur a spread in retail investor accounts. The spread refers to the contrast between the bid and ask price.
Experienced traders can use CFDs and ETFs to hedge other portfolio positions. For instance, buying the inverse S&P is a great way to hedge stock positions since this Exchange Traded Funds move opposite the stock exchange market.
CFDs are superb for hedging, mainly because the trader can use them to offset losses in their portfolio via leverage.
Both ETFs and CFD have high liquidity in their respective financial markets. Trading ETFs is like trading CFDs, which means plenty of buyers and sellers are in the stock market during trading hours. Other than that, you can get into and out of trading positions quickly.
CFDs trade over the counter, and most ETF and CFD brokers have liquidity providers. This also means you can choose to buy a CFD long and sell a CFD short anytime.
Unlike assets such as futures contracts that can expire, you can trade CFDs and ETFs for as long as you want. You may trade them over days and weeks (short periods) or months and years (long periods).
Much like their similarities, both trading options also have their differences. Below are the differences in detail:
Asset ownership is the biggest difference between ETFs and CFDs. If you buy the CFD of an asset, you do not own the asset. You only trade the price of movements of the underlying asset.
The CFD you buy gets its value from its underlying asset, thereby allowing you to make a loss or profit based on the accuracy of your predictions regarding the price movements.
In contrast, when you buy an ETF, you become the owner of a small part of the stocks it comprises. For instance, if you invest in the FTSE 100 Exchange Traded Fund, you gain trading experience and exposure to stocks like Unilever, GSK, Shell, etc.
While it is possible to trade CFDs on margin, dealing in ETFs means owning a part of the fund.
Since CFDs are derivative products, you can get a significant upside (or downside and risk losing money rapidly) and get hold of a larger position with lower capital.
Generally, you must fulfil a margin requirement of approximately 5-10% of the underlying asset value.
ETFs work differently in such cases. Even though you can deal in leveraged ETFs, said leverage is not always significant. You may even need to cover the ETF's full cost.
You can trade Contracts for Difference over the counter. To trade an Exchange Traded Fund, however, you may have to take a short or long position on it from centralised stock exchanges.
When it comes to CFDs, you trade against CFD brokers, and they are often the counterparty to your trades. You will not find CFDs listed in formal stock exchanges; other than that, over-the-counter only occurs between two parties.
CFDs, unlike centralised exchanges offering numerous price options across both the buy and sell sides, only constitute a single buy and sell price.
ETFs are regulated instruments and based on that, they are easily available to trade on stock exchanges. Stock exchanges enable institutional and individual investors to partake in trades in public venues.
Exchange Traded Funds often offer transparent pricing and follow an order flow. Market makers handle the bid-ask prices to ensure market fairness.
Regarding ETFs, the broker merely acts as a mediator between the trader and the stock market.
ETFs are cheaper compared to other instruments. You may have to pay more to trade ETFs than CFDs, especially with limited capital. Some ETF-related costs include:
In contrast, CFDs pay:
CFDs constitute a higher risk profile compared to ETFs. However, they offer better trading opportunities on trading platforms. It helps when you practice trading to avoid the risks involved.
CFDs are prone to volatility, which means you may go from a winning position to one where you may lose money when trading. Through leverage, retail investor accounts lose money beyond their invested capital.
However, you can benefit from market opportunities through your invested capital by using a sound trading strategy and carefully making predictions.
Compared to CFDs, ETFs differ regarding the risks involved. They tend to incur lower costs and offer a basket of securities, which can increase your diversification.
Another important aspect is the cost. CFD trading involves costs such as spreads, overnight financing fees, and sometimes commissions, depending on the broker. Understanding these fees is essential for effective trading. More information on CFD fees can be found here: CFD Fees. ETFs, however, typically have lower management fees but can incur brokerage fees when buying or selling shares.
Tax implications also differ between the two. For instance, CFD trading might have different tax treatments based on your jurisdiction, and it's important to be aware of these. For those in the UK, check out CFD Tax UK for more details. ETFs are usually treated as equity investments for tax purposes.
Both CFD and ETF trades are essential financial products for making money. The two have been thoroughly utilised in the traders' portfolios. The market for CFD and ETF financial instruments has increased significantly worldwide.
Brokerages have started offering CFD and ETF financial instruments trying to lure new retail traders with benefits like low commissions and fees.
Index CFDs and index ETFs are traded in greater volume compared to CFD and ETF trades on other asset classes. The main reason is that index trading may be less volatile.
In this article on CFDs vs. ETFs, we examined some of the notable advantages and disadvantages of the two. It is a known fact that no financial product can ensure a guaranteed profit, so traders are advised to have good market knowledge before investing.
Sound know-how and experience minimise the risk of losses. Additionally, it is advised to deal only with renowned regulated and trusted brokerages.
The choice between CFD and ETF trading depends on your investment goals, risk tolerance, and trading style. CFDs are more suitable for traders who are comfortable with higher risk and looking for short-term gains through leverage and margin trading. ETFs are ideal for investors seeking long-term growth and lower risk. If you're interested in exploring more about CFDs, including the best platforms and brokers, you can find comprehensive information on CFD Brokers and CFD Platforms.
We have conducted extensive research and analysis on over multiple data points on Cfd Vs Etf to present you with a comprehensive guide that can help you find the most suitable Cfd Vs Etf. Below we shortlist what we think are the best CFD brokers after careful consideration and evaluation. We hope this list will assist you in making an informed decision when researching Cfd Vs Etf.
Selecting a reliable and reputable online CFD trading brokerage involves assessing their track record, regulatory status, customer support, processing times, international presence, and language capabilities. Considering these factors, you can make an informed decision and trade CFD more confidently.
Selecting the right online CFD trading brokerage requires careful consideration of several critical factors. Here are some essential points to keep in mind:
Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.
When choosing a broker for CFD trading, it's essential to compare the different options available to you. Our CFD brokerage comparison table below allows you to compare several important features side by side, making it easier to make an informed choice.
By comparing these essential features, you can choose a CFD broker that best suits your needs and preferences for CFD. Our CFD broker comparison table simplifies the process, allowing you to make a more informed decision.
Here are the top CFD Brokers.
Compare CFD brokers for min deposits, funding, used by, benefits, account types, platforms, and support levels. When searching for a CFD broker, it's crucial to compare several factors to choose the right one for your CFD needs. Our comparison tool allows you to compare the essential features 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 | IC Markets | Roboforex | eToro | XTB | XM | Pepperstone | AvaTrade | FP Markets | EasyMarkets | SpreadEx | FXPro |
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Regulation | Seychelles Financial Services Authority (FSA) (SD018) | RoboForex Lid is regulated by Belize FSC, License No. 000138/7, reg. number 000001272. RoboForex Ltd, which is an (A category) member of The Financial Commission, also is a participant of its Compensation Fund | FCA (Financial Conduct Authority) eToro (UK) Ltd (FCA reference 583263), eToro (Europe) Ltd CySEC (Cyprus Securities Exchange Commission), ASIC (Australian Securities and Investments Commission) eToro AUS Capital Limited ASIC license 491139, CySec (Cyprus Securities and Exchange Commission under the license 109/10), FSAS (Financial Services Authority Seychelles) eToro (Seychelles) Ltd license SD076 | FCA (Financial Conduct Authority reference 522157), CySEC (Cyprus Securities and Exchange Commission reference 169/12), FSCA (Financial Sector Conduct Authority), XTB AFRICA (PTY) LTD licensed to operate in South Africa, KPWiG (Polish Securities and Exchange Commission), DFSA (Dubai Financial Services Authority), DIFC (Dubai International Financial Center), CNMV (Comisión Nacional del Mercado de Valores), KNF (Komisja Nadzoru Finansowego), IFSC (Belize International Financial Services Commission license number IFSC/60/413/TS/19) | Financial Services Commission (FSC) (000261/4) XM ZA (Pty) Ltd, Cyprus Securities and Exchange Commission (CySEC) (license 120/10) Trading Point of Financial Instruments Ltd, Australian Securities and Investments Commission (ASIC) (number 443670) Trading Point of Financial Instruments Pty Ltd | Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC), 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 | Australian Securities and Investments Commission (ASIC) Ava Capital Markets Australia Pty Ltd (406684), South African Financial Sector Conduct Authority (FSCA) Ava Capital Markets Pty Ltd (45984), Financial Services Agency (Japan FSA) Ava Trade Japan K.K. (1662), Financial Futures Association of Japan (FFAJ),, FFAJ, Abu Dhabi Global Markets (ADGM)(190018) Ava Trade Middle East Ltd (190018), Polish Financial Supervision Authority (KNF) AVA Trade EU Ltd, Central Bank of Ireland (C53877) AVA Trade EU Ltd, British Virgin Islands Financial Services Commission (BVI) BVI (SIBA/L/13/1049), Israel Securities Association (ISA) (514666577) ATrade Ltd, Financial Regulatory Services Authority (FRSA) | CySEC (Cyprus Securities and Exchange Commission) (371/18), ASIC AFS (Australian Securities and Investments Commission) (286354), FSP (Financial Sector Conduct Authority in South Africa) (50926), Financial Services Authority Seychelles (FSA) (130) | Cyprus Securities and Exchange Commission (CySEC) (079/07) Easy Forex Trading Ltd, Australian Securities and Investments Commission (ASIC) (Easy Markets Pty Ltd 246566), British Virgin Islands Financial Services Commission (BVI) EF Worldwide Ltd (SIBA/L/20/1135), Financial Sector Conduct Authority South Africa (FSA) EF Worldwide (PTY) Ltd (54018), FSC (Financial Services Commission) (SIBA/L/20/1135), FSCA (Financial Sector Conduct Authority) (54018) | FCA (Financial Conduct Authority) (190941), Gambling Commission (Great Britain) (8835) | FCA (Financial Conduct Authority) (509956), CySEC (Cyprus Securities and Exchange Commission) (078/07), FSCA (Financial Sector Conduct Authority) (45052), SCB (Securities Commission of The Bahamas) (SIA-F184), FSA (Financial Services Authority of Seychelles) (SD120) |
Min Deposit | 200 | 10 | 50 | No minimum deposit | 5 | No minimum deposit | 100 | 100 | 25 | No minimum deposit | 100 |
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Used By | 200,000+ | 730,000+ | 35,000,000+ | 1,000,000+ | 10,000,000+ | 400,000+ | 400,000+ | 200,000+ | 250,000+ | 60,000+ | 7,800,000+ |
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Platforms | MT5, MT4, MetaTrader WebTrader, Mobile Apps, iOS (App Store), Android (Google Play), MetaTrader iPhone/iPad, MetaTrader Android Google Play, MetaTrader Mac, cTrader, cTrader Web, cTrader iPhone/iPad, cTrader iMac, cTrader Android Google Play, cTrader Automate, cTrader Copy Trading, TradingView, Virtual Private Server, Trading Servers, MT4 Advanced Trading Tools, IC Insights, Trading Central | MT4, MT5, R Mobile Trader, R StocksTrader, WebTrader, Mobile Apps, iOS (App Store), Android (Google Play), Windows | eToro Trading App, Mobile Apps, iOS (App Store), Android (Google Play), CopyTrading, Web | MT4, Mirror Trader, Web Trader, Tablet, Mobile Apps, iOS (App Store), Android (Google Play) | MT5, MT5 WebTrader, XM Apple App for iPhone, XM App for Android Google Play, Tablet: MT5 for iPad, MT5 for Android Google Play, XM App for iPad, XM App for iOS (App Store), Android (Google Play), Mobile Apps | MT4, MT5, cTrader,WebTrader, TradingView, Windows, Mobile Apps, iOS (App Store), Android (Google Play) | MT4, MT5, Web Trading, AvaTrade App, AvaOptions, Mac Trading, AvaSocial, Mobile Apps, iOS (App Store), Android (Google Play) | MT4, MT5, TradingView, cTrader, WebTrader, Mobile Trader, Mobile Apps, iOS (App Store), Android (Google Play) | easyMarkets App, Mobile Apps, iOS (App Store), Android (Google Play), Web Platform, TradingView, MT4, MT5 | Web, Mobile Apps, iOS (App Store), Android (Google Play), iPad App, iPhone App, TradingView | MT4, MT5, cTrader, FxPro WebTrader, FxPro Mobile Apps, iOS (App Store), Android (Google Play) |
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Risk Warning | Losses can exceed deposits | Losses can exceed deposits | 51% of retail investor accounts lose money when trading CFDs with this provider. | 74-83% 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. | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.12% 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. | 75-95 % of retail investor accounts lose money when trading CFDs | 71% of retail investor accounts lose money when trading CFDs with this provider | Losses can exceed deposits | Your capital is at risk | Losses can exceed deposits | 75.78% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider |
Demo |
IC Markets Demo |
Roboforex Demo |
eToro Demo |
XTB Demo |
XM Demo |
Pepperstone Demo |
AvaTrade Demo |
FP Markets Demo |
easyMarkets Demo |
SpreadEx Demo |
FxPro Demo |
Excluded Countries | US, IR, CA, NZ, JP | AU, BE, BQ, BR, CA, CW, CZ, DE, ES, EE, EU, FM, FR, FI, GW, ID, IR, JP, LR, MP, NL, PF, PL, RU, SE, SJ, SS, SL, SI, TL, TR, DO, US, IT, AT, PT, BG, HR, CY, DK, FL, GR, IE, LV, LT, MT, RO, SK, CH | ZA, ID, IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, SA, 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, MG, MK, KZ, GD, FJ, PT, BB, BM, BS, AG, AI, AW, AX, LB, SV, PY, HN, GT, PR, NI, VG, AN, CN, BZ, DZ, MY, KH, PH, VN, EG, MN, MO, UA, JO, KR, AO, BR, HR, GL, IS, IM, JM, FM, MC, NG, SI, | US, IN, PK, BD, NG , ID, BE, AU | US, CA, IL, IR | AF, AS, AQ, AM, AZ, BY, BE, BZ, BT, BA, BI, CM, CA, CF, TD, CG, CI, ER, GF, PF, GP, GU, GN, GW, GY, HT, VA, IR, IQ, JP, KZ, LB, LR, LY, ML, MQ, YT, MZ, MM, NZ, NI, KP, PS, PR, RE, KN, LC, VC, WS, SO, GS, KR, SS, SD, SR, SY, TJ, TN, TM, TC, US, VU, VG, EH, ES, YE, ZW, ET | BE, BR, KP, NZ, TR, US, CA, SG | US, JP, NZ | US, IL, BC, MB, QC, ON, AF, BY, BI, KH, KY, TD, KM, CG, CU, CD, GQ, ER, FJ, GN, GW, HT, IR, IQ, LA, LY, MZ, MM, NI, KP, PW, PA, RU, SO, SS, SD, SY, TT, TM, VU, VE, YE | US, TR | US, CA, IR |
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 2025 article further below. You can see it now by clicking here
We have listed top CFD brokers below.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% 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.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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