Compare Top 5 CFD Brokers in 2021

Keen to start CFD trading but are unsure about where to start?

WeCompareOnlineBrokers.com is here to help you! We can help you discover what CFD trading is, what makes a great CFD broker and which CFD brokers we would recommend using.

A CFD, which stands for ‘Contract for Difference’, is a financial derivative product which provides investors with the opportunity to speculate on the price movement of an asset without ever owning it.

By using CFDs, a trader can buy or sell a financial instrument, with the intention of the asset moving in their favour so they can make a profit. For instance, if Mike believes that the price of oil is going to rise in value, he can open a BUY trade. If the price of oil goes up, Mike was correct and will make a profit. If the price of oil goes down, Mike will make a loss.

On this page, we have reviewed and compared some of the best CFD brokers so you can see what to look for in your search – the final decision is yours! All CFD brokers listed are fully regulated.

The Best CFD Brokers Available in 2021

Broker     Official Site   Max. Leverage Regulations Min. Deposit    Spreads From Review
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200:1 $0 0.14 (Fixed)
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500:1 $100 From 0 pips
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500:1     $200 From 0.1 pips
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400:1 $100 From 0.9 pips
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400:1   $100 From 0.5 pips
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What are CFD Brokers?

CFD brokers act as an intermediary between you, the trader, and the world’s financial markets. If you successfully open a CFD account, your CFD provider will grant you access to their live pricing feeds, an online CFD platform to trade on, educational tools, free charting packages, customer support and much more.

Finding a great CFD broker is no easy task as there are hundreds to choose from and we all have different individual trading needs. But do not worry, we have done a lot of the grunt work for you. We not only list some of the most reputable CFD brokers available, but we also provide information on they key considerations to think about when trying to find your ideal broker, as well as other useful information.

What Makes a Great CFD Broker?

With so many CFD brokers to choose from, it can become a full-time job locating one that will be a good fit. So as not to overwhelm you, we have listed the top 5 considerations to help you find the best CFD broker for your trading requirements.

Regulatory Status

Trading with a regulated CFD broker means that the broker has applied and successfully registered with a government-recognised financial institution that controls and oversees the financial industry in that jurisdiction.

Regulated brokers are required to comply with strict rules and procedures, and if these are broken, they may lose their licence. Look for a broker that is regulated by a regulatory body like the FCA or ASIC, for instance. Please note, we never recommend unregulated brokers on the website.

Fees

Always check how much it is going to cost you to trade with a broker as there can be a wide gap between firms. Some trading costs/ fees to be aware of are:

  • Spread costs
  • Commissions
  • Overnight financing
  • Inactivity fees (watch out for this one, it is a complete joke!)
  • Guaranteed stop-loss charges.

Look for a CFD broker that has low, tight spreads and low (or no) commission charges. There are a few low-cost options out there, like TD365.com, and these brokers provide excellent value to their customers.

Markets to Trade

If you want to trade a specific market, like Facebook for instance, make sure your broker of choice offers it on their CFD platform. Some brokers offer thousands of markets, others specialise in a small few so do your research before proceeding.

The Trading Platform

Every CFD broker will provide its traders with a trading platform to trade on. Your job is to find a platform that agrees with you and one you can use for the long haul. Less is more – our recommendation is to find a provider that offers a simple and easy platform to trade on.

Depositing & Withdrawing

Ensure your broker offers a range of quick and easy funding options, with no added costs for depositing. The same applies for withdrawals – they should be fast and easy to make, with no extra charges applied.

How Do You Trade with a CFD Broker?

Once you have successfully opened a CFD trading account, follow the steps below to get started.

  • Pick the market you want to trade. Are you interested in trading stocks, commodities, crypto, stocks or something else?
  • Long or Short? Do you think your chosen market is going to rise in value, or fall? Go ‘long’ (buy) if you think the asset will increase in value and go ‘short’ (sell) if you think its going to decline.
  • Amount. Now you need to decide how much you want to trade, i.e., how big, or small will your trade size be? Ensure you have a think about this before clicking ‘trade’. We recommend starting small!
  • Risk Management. Do you want to attach a stop-loss order to your trade, or a profit order, or maybe a guaranteed stop-loss? Use orders to protect yourself on the downside and upside.
  • Open the Trade. Once you have set everything up and have thought it all through, you are ready to place the trade! Once you have opened the trade, you will need to keep an eye on it to see if there is a profit or loss.

How Do CFD Brokers Make Money?

Most CFD brokers make their money by the following means:

  1. Via a trader’s transactions: spread and commission.
  2. Overnight financing
  3. Inactivity fees
  4. Client losses

Spread and Commission

These charges are common and almost all CFD brokers will charge you the spread and/or some sort of commission to open and close a trade on their platform.

Watch out for brokers that promote “no commission”, “spreads from 0 pips” or “spread free accounts”, as this usually translates to:

  • “No commission – we do not charge any commission; BUT we will charge you a large spread!
  • spreads from 0 pips – our spreads start at 0 pips – and you might get that spread once a day at 3am but generally the average spread is 0.8.
  • spread free accounts – we do not charge you spread on any of your trades BUT we will charge you a large commission!

Always look for a CFD broker that is upfront about their spreads and commission charges. If they cannot give you a straight answer, you are better off trading elsewhere.

Overnight Financing

Again, this is a pretty common charge that CFD brokers apply to your account when you keep a trade open “overnight” (5pm New York time).

Many traders have asked ‘why do brokers charge this ridiculous fee?’. The reason they charge overnight financing is because CFD trading is a leveraged product, and you are essentially borrowing funds (margin) from your CFD broker. Therefore, they charge you a small fee each night you keep a trade open as payment for crediting you money.

Inactivity Fees

This is a charge that infuriates not only us, but everyone who has ever been charged this ridiculous fee. It is a one-off fee that a CFD broker may choose to charge you if you do not trade on your account for a certain period, usually around 2-3 months.

Avoid all brokers that charge an inactivity fee as there is completely no need for it – it does not cost them anything to have your account open and unused!

Client Losses

If your broker is a ‘Market Maker’ CFD broker, that means they take on your trades and the associated risk of that trade. They do not always hedge your trade with the underlying market and so when you make a losing trade, they keep your loss (they profit).

This is common and although there is technically nothing wrong with it, some trader’s do not like the fact that a broker is helping them and being their buddy but then keeping their losses!