CFD brokers

How should a trader compare CFD brokers? And, equally, how can they identify the best broker? There are a variety of regulated and secure brokers offering CFD (Contracts For Difference) trading – but what makes one “better” than another? The answer will often require the trader to ask questions of themselves first and foremost. The best CFD broker for one trader, will not necessarily be the best choice for another.

Here we list some key details from the hand picked brokers reviewed on this site. Below that, we highlight some of the key areas where CFD brokers differ from one another, and how a trader might compare them. The needs and trading style of each trader will be different, so there is no single broker that will represent the “best” choice for all traders. Read on to find out which broker suits you best.

What are CFD brokers?

CFD brokers offer ‘Contracts for Difference’. These are a contract between broker and client that allows an asset to be traded without the client actually owning the underlying asset. They can however, realise the same profits and losses from any price movement in that asset.

Commission Comparison

How to Compare CFD brokers

  1. Spread / Commission
  2. Leverage
  3. Trading Platform
  4. Deposit and Withdrawal options
  5. Additional features
  6. Support
  7. Education
  8. Regulation
  9. Mobile App

We cover each section in detail below.

Spread or Commission

The spread or commission fundamentally impacts every trader. It is effectively the ‘cost’ of making the trade. It is therefore a very significant value to compare one broker to another. There are complications however. The spread will differ broker to broker – but also asset to asset. So a broker may have the smallest spread for Forex pairs, but the largest for indices. Depending on what assets a trader wanted to invest in, the broker might be the cheapest choice – or the most expensive. So when comparing brokers based on the spread, ensure you are checking the spread on the assets you will be trading most. (A sample of the spreads and commissions charged are shown above for each broker, simply expand each heading by clicking on the broker name.)

Margin (or Leverage)

The margin is the percentage of the overall trade value that a trader must deposit (and commit) in order to open a trade. So a £1,000 trade on the GBP/USD currency pair may only require a deposit of £50. The position however, has exposed the trader to £1,000 worth of risk (the risk of losing the entire investment is extremely small, but that is the value of the position) – hence the warning attached to CFD trading “losses can exceed your initial deposit“. Margin is also referred to as ‘leverage’. Where this is the case, the leverage is often illustrated in terms of multiples – so 200:1 would indicate leverage of 200 times the deposit. The equivalent margin would be 0.5%. So when comparing brokers, a low margin requires smaller deposits. This will be important to some traders, but less so to others.

Trading platform

The actual trading platform is often not considered before a trader makes a broker choice. That however, could be a mistake. Yes, most platforms will have similar functions – but as with anything, the usability and look and feel will be a matter of personal preference. It is very important to be trading on a platform that is familiar and easy to use. It is not uncommon for traders to miss prices, or worse, make mistakes trading, because the trading platform did not suit them for whatever reason. The ‘Cancel‘ button might be blindingly obvious to some, but if you are the trader that ended up entering a trade by mistake, you might wish you had based a broker choice on the simplicity of the trading platform. All of the platforms listed here offer demo accountstry before you buy.

Deposit and Withdrawal options

Perhaps not a trader’s first thought – but if moving money in and out of trading accounts has been problematic for you in the past, it is worth checking that the methods you want to use to fund and withdraw from your account are available with each broker.

Features (Charts, Technical Analysis, Research)

If you plan to research your trades on the same trading platform where you ultimately trade, you want to ensure you have the best research tools available there. Charting standards do differ significantly. Some brokers (IG in particular) offer outstanding charting facilities, with a range of technical analysis tools that will satisfy even the most ardent technical analysis experts. The latest news is also available within the trading area, so research can be done from one place. Other platforms seem to assume traders will have already researched their trades elsewhere, and offer pretty basic charts and little in the way of analysis tools. If this is important to you, ensure your potential broker satisfies this need.

Support and Education

Many brokers will offer educational material to their clients. These might include ebooks, webinars or even one to one training where the client requests it. Again, this might be important to some traders but not to others. It is worth noting that brokers make money when traders trade – so most educational materials will encourage lots of trading. Over trading is a common issue for many people, so is worth bearing in mind.

The available support from a broker may be reassuring for some – others may not envisage ever using it. Potential new clients who do like to know they can contact a broker might like to establish the availability and contact methods for the support desk. Most firms offer a high standard of support.

Other factors

Some other things that enable people to compare CFD brokers might include the quality and availability of a mobile trading application. As ever, trading on the move will be important to many traders – others will be happy to not use a mobile app. Regulation should be a key criteria for any broker. Only regulated CFD brokers are included on these pages, all are regulated by the Financial Conduct Authority, with the exception of Markets.com (Markets.com is operated by Safecap Investments Limited, Safecap is a regulated investment services firm authorised by CySec). This is less of a comparison factor than a prerequisite. Bonuses might also be a factor in a broker decision. The short term nature of these offers however, should mean they rank well down in the order of importance. Taking a worse spread in order to get a larger bonus makes no sense – but any trader who is likely to be successful will already know that.

Our reviews cover all of the factors required to compare CFD brokers, and as mentioned previously, all of the CFD brokers listed on our pages provide demo accounts. So traders can take their time, read the detailed review, and try out the platforms themselves before making a choice. Once you have all the information, you can then decide the best CFD broker for you.

How to find the best cfd brokers

  • Consider your own trading methods. The trades, assets and frequency.
  • Shortlist the cfd brokers that suit that trading pattern
  • Consider demo accounts. Compare the trading platforms shortlisted.
  • Identify the best choices for you.
  • Deposit and trade

Remember: Traders can use multiple brokers, and use those with the best terms for specific trades or assets.

How do cfd brokers make money?

CFD brokers generally add a price “spread” to the bid and offer prices on their markets. This represents their profit margin. For a more detailed review of how brokers make money, read are in-depth piece – How brokers make money

What is CFD trading?

A CFD is a contract between broker and trader. The contract allows the price of an underlying asset to traded, but the trader never actually owns that asset. Read our in depth explanation of the pros and cons of CFD trading here.

Best CFD Brokers – Commission comparison

Click on each broker name to compare firms – We have compared spread, commission and margin rates on like for like assets:

  • Asset – Margin / Spread
  • FTSE – 1 pt / 0.5%
  • Wall Street – 1 pt / 0.5%
  • GBP/USD – 0.9 pips / 0.5%
  • UK Shares – 0.2 pips / 0.5%
ETX Capital logo Open Account
Payout: 100%
Min Deposit: £100
Bonus: 20% to 50%
Regulation:  Yes

  • Asset – Margin / Spread
  • FTSE – 1 pt / 0.5%
  • Wall Street – 1.8 pt / 0.5%
  • GBP/USD – 1 pips / 0.25%
  • UK Shares – 1 pt (var) / 0.5%
IG Index logo Open Account
Payout: 96%
Min Deposit: £100
Bonus: None
Regulation:  Yes
  • Asset – Margin / Spread
  • FTSE – 1 pt (var) / 0.5%
  • Wall Street – 2 pt / 0.5%
  • GBP/USD – 0.2 pips / 0.5%
  • UK Shares – 0.5% / 0.5%
Markets.com logo Open Account
Payout: 95%
Min Deposit: £100
Bonus: £25 w/o deposit
Regulation:  Yes
  • Asset – Margin / Spread
  • FTSE – 1 pt (var) / 0.5%
  • Wall Street – 2 pt / 0.5%
  • GBP/USD – 0.2 pips / 0.5%
  • UK Shares – 0.5% / 0.5%
eToro logo Open Account
Payout: 96%
Min Deposit: $200
Bonus: 15-25%
Regulation:  Yes