2021’s CFD Brokers: Which is Best For You & Your Trading? (+ Brokers To Avoid)

Risk Warning: Your Capital is at Risk.

Contracts for Difference (CFDs) are popular trading instruments that allow traders to speculate on the price movements of financial assets like gold or oil without having to own the underlying assets themselves.

Your choice of a CFD broker will determine the quality of your trading experience – especially if you prefer trading on mobile with an iPad, iPhone, or Android device.

Here we recommend the best CFD brokers in who offer trading on mobile and desktop platforms, including a wide variety of underlying assets  – from gold, crude oil, and forex, to cryptocurrencies* and world events.

*Availability subject to regulations. Cryptocurrency CFDs are not available to UK retail traders.

Top-Rated CFD Brokers

This table allows you to compare brokers via our proprietary scoring system. You can click through to our full review or go directly to the broker’s website.

Scroll down below the table to read mini reviews for each of our top-rated CFD brokers.

IMPORTANT: CFDs are not available in the USA due to local regulation, and regulated brokers do not accept US citizens or US residents as clients.

Recommended CFD Brokers: Edition

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. <b>Between 71.00%-89.00% of retail investor accounts lose money when trading CFDs.</b> You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Next we give summaries for each CFD broker we’ve reviewed on our site.

Or you can learn more about CFDs in general or compare brokers on individual features, by jumping to:

• How Do CFDs Work?
• How to Choose a CFD Broker

CFD Broker Quick Reviews

For each CFD broker below, you’ll find links to our full review of that broker or you can click through to the broker’s website.

How Do CFDs Work?

Contracts for Difference (CFDs) are a type of financial product that allows traders to speculate on the price movements of an underlying asset like gold or oil instead of taking physical ownership of the product.

Let’s take crude oil, for example, and compare the difference:

Purchasing Crude Oil	Trading on Crude Oil CFDs
If a trader wants to purchase crude oil and then trade it, they’ll need a place to store it and a means of shipping it.	Storing and shipping costs are unnecessary because you’re not actually purchasing or selling the oil itself.

With CFDs, a trader is making a wager about whether the price of crude oil (or other underlying asset) will increase or decrease over an agreed-upon period of time.

The amount of this wager, the direction of the price movement (up or down), and the time period are written into a contract between a trader and a CFD broker.

When the time period for the CFD expires, the trader reaps a profit or suffers a loss, depending on whether the price change they predicted comes true or not.

Understanding Leverage

A critical part of understanding how CFDs work is the concept of leverage.

Leverage is a way for a CFD broker to underwrite much larger trades than a trader could otherwise afford. It essentially multiplies a trader’s wager.

Here’s an example of how leverage works:

Let’s say a trader has $400 dollars in funds, crude oil is trading at $40 USD per barrel, and the leverage offered by a broker is 1:10.

• Without leverage – A trader can only speculate on 10 barrels of oil.
• With 1:10 leverage – A trader can speculate on 100 barrels of oil.

Understanding Margin

If leverage sounds similar to a “loan,” that’s because it amounts to CFD broker financing for the contract duration of the CFD. The “loan” part of leverage is called margin.

In the oil CFD trading example above, the trader is borrowing $3,600 on margin from the broker for a trade: $4000 worth of oil CFDs purchased for $400.

Just like with a loan, a trader must have sufficient collateral to trade on margin. In the case of a CFD broker, that collateral comes from a trader’s equity.

It’s important to understand that a trader typically cannot make transactions that exceed their margin amount.

How Do CFD Brokers Make Money?

CFD brokers make money in two ways:

1. On an individual trader’s transactions via fees, spreads, and commissions
2. Financing and hedging.

Fees, Spreads, and Commissions

These charges allow brokers to make money on trading actions. Note that some CFD brokers may say they charge “no commissions” and still others may say they have “no fees.”

However, they may compensate for these costs in other ways. Check to see what your prospective CFD broker charges for the types of transactions you’re likely to make.

Here are some examples of fees that a CFD broker may charge.

Monthly Account Fee	Withdrawal Fees	Deposit Fees
Inactivity Fee	Borrowing Costs for Shorting	Currency Conversion Fee
Overnight Fee	Professional Trader Fees	Other Fees (eg, swap charges)

Commissions and Spreads

Typically, a CFD broker charges either spreads or commissions, but in some cases may levy both types of overhead, depending on the trade type or account type.

For example, active day traders may be charged commissions while retail traders are only charged spreads.

Financing and Hedging

As we explain above, margin is a method of financing that traders can use in combination with leverage to try for larger profits than they otherwise could afford make.

The flip side of this financing is that losses are larger, too. Losses for a trader turn into profits for the CFD broker.

Brokers also use hedging as a means of making money. Hedging is the practice of making trades (usually in the opposite pricing direction) that can offset potential losses.

Here are some common ways that CFD brokers hedge for profit:

• Forwards and Futures Contracts – These contracts “lock in” the current price of an asset for sale at a later date, regardless of the price at that time. If the later price is greater than the locked-in price, the brokerage firm takes a profit.
• Long/Short Equity – A brokerage may go long or short on instruments that are expected to go in the opposite direction of a client’s trades.

How to Choose a CFD Broker

Use the following features to assess whether a CFD broker is right for you. Where applicable, we’ve also included comparison tables for the brokers we’ve reviewed.

Regulation and Reputation

The most important consideration in choosing an online broker is whether it’s regulated by a credible governmental agency with real enforcement powers.

A regulated CFD broker must obtain a license with government oversight agencies and adhere to the rules established by them.

These rules usually include important customer safeguards such as:

• Segregating customer trading funds in separate accounts
• Submitting regular audits to regulators and
• Maintaining adequate capitalization.

If a CFD broker firm fails to adhere to a regulator’s standards, the regulator can levy fines or even revoke a firm’s license.

The Dangers of Unregulated CFD Brokers

A trader who opens an account with an unregulated broker is taking serious, unnecessary risks.

• An unregulated broker doesn’t answer to any authorities and, therefore, can do whatever it wants with customer funds.
• Since these firms operate online, it can be difficult to track them down if they defraud customers.

Reputable CFD Brokerages Are Licensed

Traders should beware of claims of regulation by bogus brokers or agencies.

Prior to opening an account, traders should check a CFD brokerage firm’s website for the licenses and registrations held by it.

Some of the largest regulatory agencies include:

• Financial Conduct Authority (FCA)
• Cyprus Securities and Exchange Commission (CySEC)
• Australian Securities and Investments Commission (ASIC)
• Financial Crimes Enforcement Network (FinCEN)

For more information about regulators in , see our in-depth regulators page.

CFD Broker Availability in

CFD brokers vary in terms of the countries they serve and the types of financial instruments they offer. Not all financial instruments are legal to trade in all countries.

Mobile and Desktop Trading Platforms

The best trading platforms offer a streamlined experience. They are fast-loading, offer real-time charting and quotes, and provide a variety of technical analysis tools.

Some CFD brokers also incorporate:

• Copy trading: the ability to mimic the trades of others on the platform
• Economic calendars
• Financial news feeds
• Drawing tools, so you can highlight areas of your technical analyses.

Mobile Trading

Since a majority of people trade on-the-go, a key consideration in choosing a CFD broker is the quality of the mobile trading app.

• Is it easy to execute trades on the go?
• Does it have all the features of the desktop app?
• Is the app fast?
• Is the app available for your phone’s mobile operating system (eg, iOS, Android, etc)?
• Does the brokerage regularly update and improve the mobile platform?

CFD Broker Mobile Features Comparison

Proprietary, MT4, and MT5 Trading Platforms

Many brokers offer the popular MetaTrader 4 (MT4) or MetaTrader 5 (MT5) platforms.

Some CFD brokers like eToro and Plus500 have their own proprietary trading platforms either instead of or in addition to the MetaTrader apps. These platforms may work via your web browser or also as downloadable desktop software.

CFD Broker Desktop Platforms Comparison

Account Types and Opening Requirements

Check the CFD broker’s available account types to make sure they have one that meets your needs. Here are some common account types.

Account Type	Description	Prevalence
Standard	A retail brokerage account that allows CFD trading.	All retail brokers offer these account types.
Demo	A way to try out a broker’s platform or practice trading using “play money.”	Most brokers offer demo accounts, but many of them have expiry periods.
Islamic	Halal (swap-free) accounts for traders who follow Sharia law	Some brokers offer these accounts. Contact the broker to be sure.
Professional	Designed for high-volume day traders.	Some brokers offer these accounts with strict funding and volume minimums.

Account opening requirements vary by broker and account type, but usually involve the following:

• Proof of identity – Proof of identity typically requires address and phone information plus a government-issued picture ID like a passport.
• Account funding – Minimum account balances can range from $1.00 to $250 for standard retail accounts. Islamic accounts sometimes require higher balances (eg, Fortrade requires $2,000). Day trading account minimums start at $25,000.

Deposits and Withdrawals

• Deposit sources – Most CFD brokers accept wire transfers and credit card funding. However, if you wish to transfer money to your account another way (eg, PayPal or Neteller), make sure the broker you like supports your preferred method.
• Account minimums – Brokers typically require a certain level of funding to be available in your account at all times to cover losses. Be sure to check our reviews: we note the CFD broker’s minimum account requirements so you’ll have the information handy.

CFD Broker Account Funding & Minimums Comparison

CFD Asset Classes Offered

In 2020, derivatives traders have a remarkable array of underlying assets to trade CFDs on:

Underlying CFD Assets	Examples
Commodities	Gold or oil price movements or on commodity futures
Currency Pairs	EUR/USD
Cryptocurrency	BTC/USD
Index Futures	FTSE 100, US 500
Stocks and ETFs	Tesla (TSLA), Facebook (FB), and Amazon (AMZN)
Other Assets	Bonds, US Treasuries, Baskets

Make sure the broker you’re considering offers CFDs on the underlying assets you’d like to speculate on.

Please Note: Availability subject to regulations. Cryptocurrency CFDs are not available to UK retail traders.

Leverage

CFD brokers vary according to whether they offer leverage and how much. Local regulations (such as those required by ESMA in the EU) also affect the amount of leverage that you are allowed to trade with.

For retail accounts, maximum leverage typically tops out at 30:1 on average. Professional trading accounts can offer much higher leverage.

Leverage Limits by Regulatory Agency

Some regulators impose leverage limits on all CFD brokers within their jurisdiction.

Region	Maximum Leverage
Europe	In countries regulated by the European Securities and Markets Authority (ESMA), the maximum leverage on CFDs is 30:1 for retail traders.
United Kingdom	The UK currently abides by ESMA’s maximum leverage of 30:1 for retail traders.
Australia	ASIC allows for leverage up to 500:1.
USA	CFDs are not available to US residents and citizens.

Max Leverage by CFD Broker

For more about leverage, check our Commodity Trading Guide.

Fees by Broker

Spreads and Commissions by Broker

Spreads can be tricky to compare across brokers because they can be charged in different ways:

• As a percentage of the trade amount (eg, 0.13%)
• As points or pips for forex trades (eg, 50 pips)

Commissions may be charged as a flat fee per transaction or a percentage of the trade amount.

Market Sentiment and Social Trading

Most CFD brokers offer some way to measure market sentiment which can give insights to how the market as a whole is leaning on a particular position.

Social trading, pioneered by eToro, allows traders to exactly copy the trades of its most successful traders.

Technical Analysis and Charting

Technical analysis and charting can help traders make decisions about which positions to take. Some CFD brokers offer more complex analysis features or more robust charting than others.

Some of the most popular analyses include:

• Buying Call Options – A bullish strategy using leverage and is a risk-defined alternative to buying stock.
• Candlestick Basics – An effective way of visualizing price movements.
• Inverted Hammer – Can act as a warning of a potential reversal upward.
• Doji Candlestick – Can signal a possible price trend reversal.
• Relative Strength Index (RSI) – An oscillator that measures current price strength in relation to previous prices.

Payment Methods

CFD brokers typically offer a wide variety of payment and deposit methods so that traders can choose which methods work best for them. The most common payment methods are:

• Credit or debit card
• Wire transfers
• PayPal
• Skrill
• Neteller

Some brokers also support niche payment services like: Abaqoos, Apple Pay, BPay, Carte Bleue, CASHU, DotPay, Fasapay, GiroPay, Google Pay, iDeal, Larda, Moneta, Poli, Przelewy24, QIWI, SoFort, Trustly, UnionPay, WebMoney, and WeChatPay.

Click here to compare different funding methods offered by different brokers.

Account Security

Although all CFD brokers require user passwords and employ back end security measures, traders wishing for more security should look for a broker that offers Two-Factor Authentication (abbreviated as 2FA).

Two-factor authentication can be done via:

• An SMS message sent to your mobile device
• An authenticator app like Google or Microsoft Authenticators
• An email message
• A security notification popup on your mobile
• Unique one-time password (OTP)

Only the following brokers offer 2FA:

Broker	Account Security
eToro	2FA via SMS
Pepperstone	2FA via Authenticator App
Plus500	2FA via One-Time Password on Google Authenticator app
Trading212	2FA via Google Authenticator or Authy app

Education and Customer Support

Consider the available support channels (eg, phone, email, live chat) and hours. Do they cover your time zone? Do they offer support in your preferred language?

Also, review the CFD broker’s site for the type of educational materials available for traders at your level.

CFD Brokers by Education and Customer Support

How We Rate CFD Brokers

When we review CFD brokers, we consider the following areas.

We revisit our assessments periodically in order to notify our readers in the event action is taken against these brokers by regulatory agencies.

There is no one online broker that’s the best fit for every trader.

Further Reading

Now you’re ready to start researching and trading CFDs!

You can also check out our other broker lists:

• Commodity Trading: Oil, Gold & Everything in Between
• Commodity Brokers: How and Where to Get Started?
• Stock Brokers: Which Broker Is Best For You?
• The Best Brokers For Options Trading
• Cryptocurrency Broker and Exchange Guide
• Best Forex Brokers: How to Choose a Broker for Forex Trading
• Bullion Dealers: How to Add Precious Metals to Your Portfolio

FAQs

Below we answer some commonly asked questions about online brokers and CFD trading.

Are CFDs legal in the US?

No, trading CFDs is illegal for US citizens and residents. Additionally, most CFD brokers don’t accept US citizens or US residents as clients. CFDs are illegal in the US because they are an over-the-counter (OTC) trading product. OTC trading products aren’t listed on regulated exchanges like the New York Stock Exchange (NYSE), bypassing US regulatory bodies.

Thus, for US citizens to trade CFDs, the US Congress would have to change regulatory law.

Is CFD trading safe?

No, CFD trading — indeed any form of trading — is not “safe.” Trading involves complex risks, that is, factors affecting price movements of assets that retail traders are unaware of or that are unpredictable. Most retail CFD accounts lose money. Only experienced traders should consider trading CFDs.

Is eToro a CFD broker?

Yes, eToro is a CFD broker (though not in the US). eToro offers CFD trading on commodities futures, currencies, indices futures, and stocks. They also offer cryptocurrency trading and cryptocurrency-fiat currency trading. In addition, account holders can buy and sell cryptocurrency on eToro without a digital wallet.

eToro is fully regulated by CySEC, FCA and ASIC.

What is the difference between CFD trading and forex trading?

CFD trading and forex (FX) trading differ in terms of the underlying assets you are trading on and the nature of the contracts. When you are trading in the foreign exchange (forex) market, you are trading currency pairs only. CFD contracts are available on a wide range of asset classes, including forex, commodities, indices, stocks, ETFs, and events.

Unlike CFDs, forex trading offers the opportunity to benefit from interest rates associated with currencies and it is legal in the US.

You can also trade spot metals in the forex market because they are considered a form of currency. For example, you can trade gold, silver, platinum, or palladium against fiat currencies. You can also trade metal pairs, such as gold vs. silver (XAU/XAG).

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Credits: Originally written by Lawrence Pines. Major updates in October 2020 by Natalie Mootz; in June 2020 by Sherrie Gossett; and with contributions from the Commodity.com editorial team.