Best CFD Brokers in 2021

logomark Filippo Ucchino calendar Last Updated: November 2021 timer 12 min read
Top Rated:
Connect with us

At InvestinGoal, we adhere to strict standards to ensure an unbiased review process. We conduct our reviews by examining each broker’s offering and performance across 4 key categories. A final rating is produced for each forex broker based on a total of 187 data points. Learn more about our review process and methodology.

Contract for difference (CFDs) are popular financial assets that every trader should have in his/her portfolio. For new traders, it can be challenging to understand the concept, advantages, and disadvantages of CFDs. Contract for difference allows forex traders to speculate on different financial assets without directly owning the underlying asset.

CFDs are offered by online brokers alongside other financial instruments like spot metals and commodities. However, unlike commodities and spot metals, CFDs are in the form of derivative trading. In this post, we have put together the best CFD brokers for your consideration. You can read our guide on the top 10 forex brokers to have an in-depth knowledge on what to look out for when choosing a forex broker.

Table of contents

Top 10 best CFD brokers for 2021

Visit Broker
68% of retail investor accounts lose money

1. eToro

eToro is a social trading broker and one of the best CFD brokers on the market. If you are a newbie just starting out, you can leverage eToro’s copy trading features to make the most out of the forex market. eToro has more than 1,000 financial instruments in its asset class, including CFDs, shares, ETFs, and cryptocurrencies.

To start CFD trading on eToro, you need a trading account. You can open a new trading account with a minimum of $200. Plus, eToro has one of the best unlimited demo accounts. You can use the demo account to improve your trading skills, only that you won’t make real money with it. If you don’t know how to get started, eToro has a user-friendly and responsive customer support team that you can rely on to navigate the forex market.

78
Rated: Excellent
Security 94
Cost 71
Trading 69
Education 63

Platforms: Proprietary Web Platform Regulations: FCA, CFTC, MIFID-ESMA, ASIC, CYSEC Minimum Deposit: 200
Visit Broker
76% of retail investor accounts lose money

2. Trading 212

Trading 212 is another great CFD broker that accommodates both new and experienced traders. Similar to eToro, Trading 212 has rising popularity in the EU and the UK. There are more than 3,500 assets available on Trading 212. Whether you want to trade shares, commodities, cryptocurrencies, or pure metals, Trading 212 has got you covered.

The good thing about Trading 212 is that you can open and maintain a trading account with as low as $1. But if you opt for a CFD account, the minimum deposit to open this account is $10. Trading 212 has an unlimited demo account that you can activate to learn the nitty-gritty of the CFD market. Trading 212 also has sufficient educational resources for new traders. So, if you are new to forex trading, there are enough resources that will bring you up to speed with happenings on the market.

80
Rated: Excellent
Security 94
Cost 80
Trading 70
Education 66

Platforms: Proprietary Web Platform, MAC Platforms Regulations: FCA, MIFID-ESMA, Offshore Minimum Deposit: 1
Visit Broker
74-89% of retail investor accounts lose money when trading CFDs

3. Pepperstone

Pepperstone is an Australian broker that is highly regulated by the relevant government regulatory agencies in the jurisdictions it operates. This broker is ideal for any kind of trader, and a top choice for scalpers. Pepperstone has more than 3,000 financial instruments in its asset class. So, regardless of your trading niche, Pepperstone has got you covered.

This broker comes with low spreads from 0 pips guaranteed by ECN execution. Opening a trading account doesn’t require any minimum deposit. This means you can start your CFD trading career without depositing a dime into your trading account. Plus, the deposit/withdrawal methods are user-friendly. Pepperstone also supports a wide variety of trading platforms, including MetaTrader and cTrader.

90
Rated: Excellent
Security 94
Cost 75
Trading 100
Education 71

Platforms: cTrader desktop, cTrader web, ZuluTrade, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, MAC Platforms Regulations: FCA, MIFID-ESMA, ASIC, DFSA, CYSEC, Offshore Minimum Deposit: 0
Visit Broker
72% of retail investor accounts lose money

4. Plus500

Plus500 is like a household name on the trading market. In fact, it is one of the best CFD providers in the UK. This CFD platform is regulated by the Financial Conduct Authority (FCA) and tried to reduce non trading costs to the minimum.

Plus500 has a well-designed proprietary trading platform, which can be used as Webtrader. To get started, you are required to open a new trading account with at least $100. But before you start trading with a live account, ensure you perfect your trading skills with a demo account. Thankfully, Plus500 has an unlimited demo account that you can take advantage of. Then, when you are confident of your trading skills, you can then upgrade to a live account.

74
Rated: Excellent
Security 96
Cost 70
Trading 66
Education 37

Platforms: Proprietary Web Platform Regulations: MAS, FCA, MIFID-ESMA, ASIC, FMA, CYSEC, ISA, Offshore Minimum Deposit: 100
Visit Broker
76% of retail CFD accounts lose money

5. IG Markets

IG Markets is one of the best CFD brokers in the UK. This online broker has more than 30 years experience in the financial markets and with a physical worldwide presence. With more than 17,000 assets available only as CFDs, forex traders certainly have the opportunity to include different assets into their portfolio.

IG Markets supports Turbo Wallet but they are exclusive for UK and EU traders. IG Markets has low spreads, but not the lowest you can find. However, this relies on the cost of the entire facility. To open a new account on IG Markets, you need at least $250 to start with. Once you get an account running, deposit funds, start trading, and make money.

90
Rated: Excellent
Security 98
Cost 62
Trading 100
Education 84

Platforms: Proprietary Web Platform, MAC Platforms Regulations: FSA, MAS, FINMA, FCA, CFTC, MIFID-ESMA, ASIC, FMA, FSCA, DFSA Minimum Deposit: 300
Visit Broker
79% of retail investor accounts lose money

6. AvaTrade

AvaTrade is an Irish and a well-regulated broker. This CFD broker has several financial instruments in its asset class. Whether you want to trade forex, stocks, pure metals, or cryptos, AvaTrade has got your back. It charges only fixed spreads which start from 0.9 pips on Forex. Traders will also find vanilla options.

AvaTrade has a user-friendly proprietary social trading platform that you can leverage to reach your revenue projections. Plus, they have a demo account. You can use the demo account to improve your trading skills, only that you won’t make real money with it. If you don’t know how to get started, AvaTrade has a responsive customer support team that you can rely on to navigate the forex market.

82
Rated: Excellent
Security 94
Cost 78
Trading 75
Education 72

Platforms: Mirror Trader, ZuluTrade, MT4 Web, MT5 Web, Proprietary Web Platform, MAC Platforms Regulations: FSA, MIFID-ESMA, ASIC, IIROC, FSCA, Offshore, FSC (British) Minimum Deposit: 100
Visit Broker
74-89% of retail CFD accounts lose money

7. IC Markets

IC Markets is an ECN Australian broker. This CFD broker has more than 1,000 financial instruments in its asset class, including CFDs, shares, ETFs, and cryptocurrencies. As such, it is a top choice for scalping and Algo-trading. To start CFD trading on IC Markets, you need a trading account. You can open a new trading account, as there is no minimum deposit required.

One of IC Markets’ unique selling proposition is that there is fast order execution on their trading platforms. Plus, they charge really low spreads from 0 pips. IC Markets’ has an unlimited demo account that you can activate to learn the nitty-gritty of the CFD market. Additionally, they have sufficient educational resources for new traders.

92
Rated: Excellent
Security 93
Cost 91
Trading 100
Education 66

Platforms: cTrader desktop, cTrader web, Mirror Trader, ZuluTrade, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web Regulations: ASIC, CYSEC, Offshore Minimum Deposit: 0
Visit Broker
73% of retail investor accounts lose money

8. Forex.com

Forex.com is a US-based broker but accepts traders from across the world, including Europe, Australia, Canada. Forex.com is one of the main CFD forex brokers in the world. The spreads they charge are on average with the industry but a DMA Account is also available for traders who can afford it since a balance of $25,000 is recommended.

On the DMA Account, the spreads are kept to a minimum and a great depth of liquidity guarantees quick entry and exit of the markets. However, retail clients have a minimum deposit of $50 instead. Forex.com has an unlimited demo account that you can take advantage of. Then, when you are confident of your trading skills, you can then upgrade to a live account.

81
Rated: Excellent
Security 95
Cost 69
Trading 75
Education 82

Platforms: MT4 Dekstop, MT4 Web, Proprietary Desktop Platform, Proprietary Web Platform Regulations: FSA, FCA, CFTC, MIFID-ESMA, IIROC, SFC, CYSEC, Offshore Minimum Deposit: 100
Visit Broker
73.50% of retail investor accounts lose money

9. Oanda

Oanda is another US-based CFD broker. This broker is recommended for newer traders because they have an unlimited demo account and they do not require minimum deposit before opening an account. Plus, they support nano-lots trading, which means you can open positions with cents. The range of assets is limited with a little more than 100 available.

Spreads charged on the Oanda platform are on average starting from 1 pip. They have a user-friendly MetaTrader trading platform available along with a proprietary Web trader.

80
Rated: Excellent
Security 94
Cost 70
Trading 71
Education 80

Platforms: MT4 Dekstop, MT5 Desktop, MT5 Web, Proprietary Desktop Platform, Proprietary Web Platform, MAC Platforms Regulations: FSA, MAS, FCA, CFTC, MIFID-ESMA, ASIC, IIROC Minimum Deposit: 0
Visit Broker
73.57% of retail investor accounts lose money

10. XM

XM is an international CFDs broker with attention on both newbie and experienced traders. It is well-regulated but does not have a great range of assets in its asset class. XM has three account types, but before you choose one, ensure you study the features of each account.

Meanwhile, to use the Micro account, you need a minimum of $5. Spreads charged on their trading platforms can get as low as 0 pips. There is also the availability of a demo account. If you are a newbie, you can use the demo account to perfect your trading skills so that when you hit the market, you will quickly reach your profit potentials.

77
Rated: Excellent
Security 94
Cost 74
Trading 65
Education 68

Platforms: MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, MAC Platforms Regulations: MIFID-ESMA, ASIC, CYSEC Minimum Deposit: 5

Round-up of the best CFD brokers

WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Between 74-89% of retail investor accounts lose money when trading CFDs.
You should consider whether you can afford to take the high risk of losing your money

Broker Demo Account Minimum Deposit Spreads from
eToro Unlimited $200 1 pip
Trading 212 Unlimited $1 0.8 pips
Pepperstone 30 days Not required 0 pips
Plus500 Unlimited $100 1 pip
IG Markets Unlimited $250 0.6 pips
AvaTrade 21 days $100 0.9 pips
IC Markets Unlimited Not required 0 pips
Forex.com 30 days $50 0.2 pips
Oanda Unlimited Not required 1 pip
XM Unlimited $5 0 pips

What is a CFD broker?

A CFD broker is an online financial intermediary which allows trading of Contracts For Difference (CFDs). CFDs allow forex traders to speculate on different financial assets without directly owning the underlying asset. The major advantage of CFD is that traders are not exposed to the costs of traditional trading.

CFD brokers aren’t exclusive for CFDs trading, however the availability of other products is solely dependent on the broker itself. It is a common case to see a CFD broker offering other derivative assets such as Vanilla Options (not to be confused with Binary Options), Spread Betting (available only in the UK, Ireland and few other jurisdictions), and many others.

What are the CFDs?

CFDs is an acronym which stands for “contract for difference.” At its core, they are derivative instruments which mirror the market value of an asset. CFDs allow you to speculate on different asset prices without actually owning the underlying assets. In other words, with CFDs, traders speculate on the rising or falling of the asset’s value without owning the underlying asset.

Additionally, with CFDs trading, there are no changes on trading. For instance, if you were to invest $100 in a CFD which will see its value rising by 10%, your investment will rise to $110 as well. CFDs lets you invest and profit from falling markets, that is, when you go short.

CFDs Features

One major advantage of CFD is that traders are not exposed to the costs of traditional trading. Other reasons why people prefer CFDs are:

  1. Leverage

Leverage is like a loan given to you by a broker. It allows you to open trading positions with less capital than traditional trading. For instance, if you have $100 in your trading account, you can access “leverage” from your broker to open a trade position worth $1,000. While leverage is good, it also comes with lots of risks. So, be mindful of how you use leverage when trading.

  1. Going Long or Short

CFDs also allow you to go long or short depending on your trading preferences. As you don’t own the underlying asset, CFDs make it possible to speculate in both directions.

  1. Daily Rollover Fees

This is another feature that comes with CFD trading. Interest rate applied to every CFD. Its value will increase with a higher leverage and a larger investment.

CFD Brokers: Here’s what to look out at

With the number of CFD brokers on the market, it can be overwhelming for a beginner to choose a broker to cater to his/her trading needs. In this section, we will walk you through some factors to look out for before settling for a CFD broker.

The first thing to look out for is a CFD broker with leverage. However, keep in mind that setting a leverage (which may also be 1:1) will multiply not only your profits but your losses as well. Therefore, tread with caution when accessing leverage from your broker.

Another factor to look out for is whether or not a CFD broker allows going short. This is a highly risky strategy generally adopted by investment funds. It is off-limits for retail clients since shorting is an extremely complicated and risky strategy. However, CFDs allow it though. If you can lose 100% by going long, losses might be far beyond this amount with going short.

If you can adhere to these factors we have highlighted above, you’d be a step closer to becoming a successful CFD trader.

Trading with CFD brokers: Interests and Commissions

CFD brokers generally generate their revenue through different means. Some of the ways through which CFD brokers generate revenue include:

  1. Spread

This is the common means that most CFD brokers rely on to generate their revenue. Regardless of the financial instrument you have in mind to trader on the CFD market, you’d be charged spread on trading. The money goes directly to the broker.

  1. Overnight Fee

Overnight fee is usually charged daily on your investment. This fee is a small interest you pay to the CFD broker for stacking up your investment portfolio. This makes CFDs ideal for day traders but on the other end they are bad for long-term investments.

  1. Commission Per Lot Traded

Commission per lot traded is usually not applied. It is charged along with very low spreads (generally on ECN brokers). It is $4 per lot (100,000 USD) on average.

CFD brokers: Safe or Scam?

With the number of CFD brokers on the market, the chances of a scam is very high. As such, CFD traders need to do their due diligence before settling for a broker. But generally, to avoid choosing a scam broker, pick a regulated broker. Every broker must show its license on their website, but you still need to double-check on the regulator’s website.

If you cannot determine their regulation status via the regulator’s website, you can reach out to the regulator’s customer support for further confirmation. The bottom line is that regulated CFD brokers are safe. Each jurisdiction has at least one regulator, so it won’t be difficult to ascertain the regulation status of a broker.

Jurisdiction Regulator Body Full name
UK FCA Financial Conduct Authority
Europe ESMA European Securities and Markets Authority
Australia ASIC Australian Securities and Investments Commission
Canada IIROC Investment Industry Regulatory Organization of Canada
Dubai DFSA Dubai Financial Services Authority
Singapore MAS Monetary Authority of Singapore
Japan JFSA Japanese Financial Services Agency
South Africa FSCA Financial Sector Conduct Authority

How do CFD brokers hedge?

The hedging of a CFD broker generally depends on the situation and their policy. Generally speaking, this is how it works. If you’re going long, the broker will go short and vice versa. This is not to go against you or to manipulate the market, but it is so the broker can recover from a possible loss.

The broker cannot possibly go against you since the investment amount will be irrelevant compared to the global market amount. Additionally, the CFD broker is often a Market Maker. This means that if a trader profits the broker lose and vice versa

CFD brokers Pros and Cons

Depending on the CFD broker you choose to partner with, there are pros and cons you should expect to deal with.

Pros

  • Unlike in the past where it cost so much to access the financial market, CFD brokers enable you to access the market with a low budget
  • CFDs give high flexibility due to the dynamics of the market
  • CFD trading is suitable for day traders as they don't get to pay overnight fees

Cons

  • Regardless of the benefits of CFD trading, it is still a risky investment to venture into
  • If you're looking for a long-term investment, CFD trading is certainly not it

Conclusion

CFDs are popular financial instruments that every trader should include in their portfolio. With CFDs, traders are not exposed to the costs of traditional trading.

With so many CFD brokers on the market, you can read our guide on the top 10 forex brokers in order to choose the best CFD broker that will cater to your trading needs.


About the Author

Filippo Ucchino

Co-Founder - CEO - Broker Expert
Filippo is the co-founder and CEO of InvestinGoal.com. He has 15 years of experience in the financial sector and forex in particular. He started his career as a forex trader in 2005 and then became interested in the whole fintech and crypto sector.
Over this time, he has developed an almost scientific approach to the analysis of brokers, their services, and offerings. In addition, he is an expert in Compliance and Security Policies for consumers protection in this sector.
With InvestinGoal, Filippo’s goal is to bring as much clarity as possible to help users navigate the world of online trading, forex, and cryptocurrencies.

Leave a Reply

Your email address will not be published. Required fields are marked *

Keeping you better informed

Find and Compare the Best
Online Brokers for You

Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading CFDs with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how CFDs, FX, and cryptocurrencies work. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Your capital is at risk. The present page is intended for teaching purposes only. It shall not be intended as operational advice for investments, nor as an invitation to public savings raising. Any real or simulated result shall represent no warranty as to possible future performances. The speculative activity in forex market, as well as in other markets, implies considerable economic risks; anyone who carries out speculative activity does it on its own responsibility.
ADVERTISER DISCLOSURE: InvestinGoal is completely free to use for all. Though we may receive a commission from brokers we feature, this does not impact the results of our reviews or rankings which are conducted with complete independence and objectivity, following our own impartial methodology. Help us continue to provide the best free broker reviews by opening your account with our links. Please read our Advertiser Disclosure to learn more.
Copyright © 2021 InvestinGoal.com – All rights reserved. / Privacy and Cookie Policy / Basic Terms of Use / Sitemap