We found 11 online brokers that are appropriate for Trading CFD.
CFD vs options is a unique guide to help traders understand the values of both the processes of wealth building. In this article, we will discuss the differences and similarities of the two while wrapping up with which is better, CFD vs options.
Both are financial derivatives. Traders can speculate the markets with both. However, the two are not the same. Let's find out the differences in CFD vs options.
In CFD, which is the abbreviation for contracts for difference, the trader agrees to exchange the price variation of an underlying asset while in options it is buying and selling the right of an underlying asset at a certain fixed price.
The two fit different strategies even though traders do not need to take ownership of the underlying assets. The two have their own unique risks and rewards based on different trading skills.
With CFD trading a trader opens and closes a position based on the agreed exchange of price differences of assets. If the market is speculated to move up, a CFD is purchased. The vice versa takes place if the market is believed to go down. The level of the price movement of the underlying assets determines the level of profits or losses.
Let us understand with an example. Asssuming the current price value of stock X is £290 and speculated to go up. A trader opens a position and closes it when the price moves up. The difference in opening and closing price here is his or her profit.
Now, if the price of the stock drops and the position is closed, the difference is a loss to the trader.
Similar to traditional stock trading, the trader pays a commission to the broker in CFD trading. Hence, it is to consider that the sell price should be more than the commission or fee to make a profit.
Basically, CFD is used in trading stocks, but it is not limited to it. Traders also buy and sell commodities, indices, currencies and cryptocurrencies under it.
It is a little different from CFD. A trader does not take the contract of the asset. In fact, he buys or sells trading opportunities for the underlying asset for a set period and at a fixed price.
Suppose a trader believes the stock price of Company X may rise from the current £290 and hence buys an option to purchase when the price goes up to £295 at any point in the next thirty days. He exercises the option when the price reaches £295.
The trader pays a premium to get the option and if the price of £295 is not reached, he loses the premiums money. Furthermore, to earn a profit, he needs to make more money than the paid premium.
It is usually classed as a 'call' option if the price reaches the estimation. A trader can use the derivative to go short, which is called 'put' options and it enables selling at a fixed price at a predefined time. Here, the primary risk is the option premium.
Selling the options is called 'writing'. Writing a call means opening a short position. If a trader writes a put, he opens a long position. Premium is received while selling an option. However, the risk is potentially unlimited here.
CFD mimics trading of underlying markets and prices are driven by the market movements. The premiums of options are not driven by just the price of the asset.
There is no expiry date in CFD trading but in options, the contracts have an expiry date. In options, there is time decay, which means the price drops as it moves to expiry. There is no such thing as time decay in CFD.
In CFD the capital required to trade the same value as in options is far low. This is called leverage, which means the money beyond down payment is borrowed by the broker.
Which is better in CFD vs options depends on the trading skill of a trader and what is expected from the trade. If capital is low, a trader can opt for CFD trading as leverage features can be utilised.
Comparatively, CFD is more transparent. The price movement is one for one. A trader having familiarities about how the market works can understand it easily. In options, a bit of more knowledge is required.
Both are popular financial derivatives and traders across the world believe can make money with either. We have discussed the differences between the two and it is suggested to choose one according to one's trading skills and expectations. However, it is better to have choices and hence a portfolio must accommodate both in certain percentages.
Also make sure you understand that CFD trading due to the leverage can be very risky. Make sure you understand CFDs and options fully before trading.
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 Vs Options 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
![]() |
IC Markets
![]() |
XTB
![]() |
AvaTrade
![]() |
Roboforex
![]() |
FP Markets
![]() |
Plus500
![]() |
Pepperstone
![]() |
EasyMarkets
![]() |
XM
![]() |
FXPrimus
![]() |
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) | Central Bank of Ireland, Australian Securities and Investments Commission (ASIC), Financial Services Authority (FSA), South African Financial Sector Conduct Authority (FSCA), Financial Stability Board (FSB), Abu Dhabi Global Markets (ADGM), Financial Regulatory Services Authority (FRSA), British Virgin Islands Financial Services Commission (BVI) | Cyprus Securities and Exchange Commission (CySEC) | Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC) | 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 | 250 | 1 | 100 | 100 | 200 | 100 | 5 | 100 |
Funding |
|
|
|
|
|
|
|
|
|
|
|
Used By | 20,000,000+ | 180,000+ | 250,000+ | 200,000+ | 10,000+ | 10,000+ | 15,500+ | 10,000+ | 142,500+ | 3,500,000+ | 10,000+ |
Benefits |
|
|
|
|
|
|
|
|
|
|
|
Accounts |
|
|
|
|
|
|
|
|
|
|
|
Spreads |
|
|
|
|
|
|
|
|
|
|
|
Platforms | Web Trader, Tablet & Mobile apps | MT4, MT5, Mirror Trader, ZuluTrade, Web Trader, cTrader, Mac | MT4, Mirror Trader, Web Trader, Tablet & Mobile apps | Web Trader, MT4, MT5, AvaTradeGo, AvaOptions, Mac, Mobile Apps, ZuluTrade, DupliTrade, MQL5 | MT4, MT5, Mac, Web Trader, cTrader, Tablet & Mobile apps | MT4, MT5, IRESS, Mac, 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 |
Support |
|
|
|
|
|
|
|
|
|
|
|
Learn More |
Sign
Up with etoro |
Sign
Up with icmarkets |
Sign
Up with xtb |
Sign
Up with avatrade |
Sign
Up with roboforex |
Sign
Up with fpmarkets |
Sign
Up with plus500 |
Sign
Up with pepperstone |
Sign
Up with easymarkets |
Sign
Up with xm |
Sign
Up with fxprimus |
Risk Warning | 67% of retail investor accounts lose money when trading CFDs with this provider. | Losses can exceed deposits | 79% 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. | 72% of retail investor accounts lose money when trading CFDs with this provider | Losses can exceed deposits | Losses can exceed deposits | 72% 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 |
AvaTrade Demo |
Roboforex Demo |
FP Markets 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 | BE, BR, KP, NZ, TR, US, CA, SG | US, JP | US, JP, NZ | 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.