PepperstoneVisit Pepperstone74-89% of retail investor accounts lose money when trading CFDs
XMVisit XM77,37% of retail investor accounts lose money
XTBVisit XTB79% of retail investor accounts lose money
FxProVisit FxPro72.87% of retail investor accounts lose money
IG MarketsVisit IG Markets70% of retail CFD accounts lose money
AdmiralsVisit Admirals76% of retail investor accounts lose money
ActivTradesVisit ActivTrades75.7% of retail CFD accounts lose money
CMC MarketsVisit CMC Markets78% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.
In the United Kingdom, CFD (Contract For Difference) trading is widely used by investors and is regulated by the Financial Conduct Authority (FCA).
In this top ten we have chosen and studied some of the best UK CFD brokers.
In forming this listing, we have considered the following:
- Regulation and offices in the UK
- Number of CFD assets
- Spreads offered
- Leverage provided
|UK CFD Brokers||Number of CFD assets||UK regulation|
What are the best UK CFD brokers?
Below our curated list of the best UK brokers for CFD trading, with details of features and characteristics.
Is CFD trading legal in the UK?
Contract for Difference (CFD) trading is legal in the United Kingdom, and also stringently regulated by the FCA to ensure the protection of both the traders and the financial markets.
The Financial Conduct Authority (FCA) is the body responsible for overseeing CFD trading activities. This is to ensure a transparent and secure trading environment.
Any CFD broker who wishes to operate within the UK boundaries must possess a valid license issued by the FCA. The authority doesn’t take the licensing process lightly. It scrutinizes the operations, finances, and systems of brokerages to ensure they meet the necessary standards.
Furthermore, in cases where a British CFD broker commits fraudulent activities or operates without the required FCA license, there are severe consequences. Such brokers may have their websites obscured, thereby making them inaccessible to potential and current clients. In addition, hefty fines can be levied on them. In extreme cases, the heads or primary stakeholders of the offending CFD broker may face jail time, demonstrating the seriousness of the regulatory environment in the UK.
Are there CFD trading limitations in the UK?
While CFD trading is legal and popular in the UK, it doesn’t come without its set of regulations and limitations. These are in place to safeguard the interests of retail traders and prevent potential market manipulations. The main CFD trading limitations in the UK are 2
- Leverage limits to 1:30 depending on the asset class
- Cryptocurrencies cannot be traded with leverage
The maximum leverage allowed for retail traders is in fact 1:30. However, for those classified as professional traders, they might be granted a higher leverage, going up to 1:500. It’s important for traders to understand the risks associated with leverage. While it can amplify gains, it can also magnify losses.
Trading cryptocurrencies as CFDs is permissible in the UK. However, one significant limitation is that no leverage is permitted when trading crypto CFDs. This decision has been made keeping in mind the volatile nature of cryptocurrencies, which can lead to massive losses if traded with high leverage.
Beyond the above-stated rules, there aren’t any other specific restrictions on CFD trading in the UK. However, traders are always advised to stay updated with any new regulations or changes that the FCA might introduce.
Is CFD trading taxable in the UK?
The taxation system in the UK makes a distinction based on the amount gained from CFD trading. The earnings or profits made from trading CFDs are indeed taxable.
A clear threshold has been established at £6000. If a trader’s earnings from CFDs exceed this amount in a tax year, they are liable to pay capital gains tax on the amount exceeding the threshold. However, if the earnings remain below the £6000 mark, traders are not required to pay any taxes on their CFD gains.
Traders should always consult with a tax advisor or accountant to ensure they comply with the current tax regulations and understand any deductions or allowances they might be entitled to.
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