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Contracts-for-differences (CFDs) allow you to trade stocks, gold, oil, cryptocurrencies, indices, and more without owning the underlying asset. When trading CFD instruments, you can apply leverage to your positions, choose from a long or short order, and in many cases – trade without paying any commission.

In this guide, we review the best CFD brokers for 2021 and give you a bit of background as to how this popular trading scene works.

Best CFD Brokers List

Below you will find a list of the best CFD brokers in the market right now. To read our full review of each CFD broker – simply scroll down!

  • eToro – Overall Best CFD Broker 2021
  • Capital.com – Best CFD Broker for Beginners ($20 Minimum Deposit)
  • Libertex – Libertex – Best CFD Broker for Low-Cost Trading
  • AvaTrade – Best CFD Broker for MT4
  • VantageFX – Best CFD Broker for High Leverage
  • Pepperstone – Pepperstone – Best CFD Broker for MT5 and cTrader
  • IG – Best CFD Broker for Asset Diversity
  • Skilling – Best CFD Broker for Mobile Trading
  • Forex.com – Best CFD Broker for Liquidity and Pricing
  • Trading 212 – Best CFD Broker for Small Stakes and Casual Traders

Best CFD Brokers

My Trade Size

€ 10 (0.0001 lots)

Sort By

7 Providers that match your filters

Deposit Methods

Trading Platforms

Regulated by

Additional Features

Min. Deposit

€500

Min. Spread

2

Max. Leverage

2:1

Currency Pairs

1+

Rating

1 or better

Mobile App

1 or better
Recommended Broker
386 New users today
eToro

Rating

Total Cost

€0.00

Mobile App
10/10

Min. Deposit

€50

Min. Spread

1 pips

Max. Leverage

50:1

Currency Pairs

52

Trading Platforms

Demo
WebTrader
CopyTrading

Deposit Methods

Bank TransferCredit Card

Regulated by

FCA, CySEC, ASIC, CFTC, NFA, BAFIN

What you can trade

Forex

Indices

Actions

Cryptocurrencies

Raw Materials

ETFs

Average spread

EUR/GBP

2.5

EUR/USD

1

EUR/JPY

2

EUR/CHF

5

GBP/USD

2

GBP/JPY

3

GBP/CHF

4

USD/JPY

1

USD/CHF

1.5

JPY/CHF

2.7

Additional Fees

Rolling fee

0

Conversion

0

Leveraged

30:1

FCA

30:1

CySEC

30:1

ASIC

30:1

CFTC

30:1

NFA

30:1

BAFIN

Libertex

Rating

Total Cost

€0.11

Mobile App
9/10

Min. Deposit

€0

Min. Spread

0.9 pips

Max. Leverage

2:1

Currency Pairs

50

Trading Platforms

Demo
WebTrader
MT4
STP/DMA

Deposit Methods

Bank TransferCredit CardGiropayNetellerPaypalSkrillSofort

Regulated by

FCA, CySEC, ASIC, CFTC, NFA, BAFIN

What you can trade

Forex

Indices

Actions

Cryptocurrencies

Raw Materials

ETFs

Average spread

EUR/GBP

1.4

EUR/USD

0.9

EUR/JPY

1.8

EUR/CHF

2.1

GBP/USD

1.2

GBP/JPY

1.9

GBP/CHF

2.2

USD/JPY

1.2

USD/CHF

1.1

JPY/CHF

2.7

Additional Fees

Rolling fee

Conversion

Leveraged

30:1

FCA

30:1

CySEC

30:1

ASIC

30:1

CFTC

30:1

NFA

30:1

BAFIN

Your capital is at risk

Capital.com

Rating

Total Cost

€0.00

Mobile App
9/10

Min. Deposit

€20

Min. Spread

0.6 pips

Max. Leverage

20:1

Currency Pairs

100

Trading Platforms

Demo
WebTrader
MT4
MT5

Deposit Methods

Bank TransferCredit CardNetellerSepa TransferSkrill

Regulated by

FCA, CySEC, ASIC, CFTC, NFA, BAFIN

What you can trade

Forex

Indices

Actions

Cryptocurrencies

Raw Materials

Average spread

EUR/GBP

1.4

EUR/USD

0.6

EUR/JPY

1.5

EUR/CHF

2.2

GBP/USD

0.8

GBP/JPY

1.9

GBP/CHF

2.4

USD/JPY

1.3

USD/CHF

1.3

JPY/CHF

2.6

Additional Fees

Rolling fee

0

Conversion

0.0

Leveraged

30:1

FCA

500:1

CySEC

30:1

ASIC

30:1

CFTC

30:1

NFA

30:1

BAFIN

Forex.com

Rating

Total Cost

€0.00

Mobile App
10/10

Min. Deposit

€100

Min. Spread

1 pips

Max. Leverage

100:1

Currency Pairs

50

Trading Platforms

Demo
WebTrader
MT4
MT5

Deposit Methods

Bank TransferCredit Card

Regulated by

FCA, CySEC, ASIC, CFTC, NFA, BAFIN

What you can trade

Forex

Indices

Actions

Cryptocurrencies

Raw Materials

Average spread

EUR/GBP

1.4

EUR/USD

1

EUR/JPY

1.8

EUR/CHF

2.3

GBP/USD

1.1

GBP/JPY

1.9

GBP/CHF

2.5

USD/JPY

1.2

USD/CHF

1.1

JPY/CHF

2.8

Additional Fees

Rolling fee

Conversion

Leveraged

30:1

FCA

30:1

CySEC

30:1

ASIC

30:1

CFTC

30:1

NFA

30:1

BAFIN

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Find the Best CFD Brokers – Comparison

Recommended Broker
eToro
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Forex.com
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Rating
5.00
5.00
5.00
Mobile App Rating
10/10
10/10
10/10
Regulation
FCA, CySEC, ASIC, CFTC, NFA, BAFINFCA, CySEC, ASIC, CFTC, NFA, BAFINFCA, CySEC, ASIC, CFTC, NFA, BAFIN
Min. Deposit
€50€100€200
Min. Spread
111.1
Max. Leverage
50:1100:1200:1
FX Pairs
525040
EUR/GBP
2.51.41.3
EUR/USD
111.1
EUR/JPY
21.81.5
EUR/CHF
52.31.7
GBP/USD
21.11.1
GBP/JPY
31.91.7
GBP/CHF
42.52
USD/JPY
11.21.2
USD/CHF
1.51.11.1
JPY/CHF
2.72.82.6
Rolling fee
0N/AN/A
Conversion Fee
0N/AN/A
Demo
WebTrader
CopyTrading
MT4
MT5
STP/DMA
FCA
30:130:130:1
CySEC
30:130:130:1
ASIC
30:130:130:1
CFTC
30:130:130:1
NFA
30:130:130:1
BAFIN
30:130:130:1
Forex
Indices
Actions
Cryptocurrencies
Raw Materials
ETFs
Islamic Account
Education & Webinars
Charts & Tools
Scalping
Bank Transfer
Credit Card
Neteller
Skrill

Top 10 CFD Brokers Reviewed

In order to compare CFD brokers – we focused on a number of key metrics. This is inclusive of tradable markets, fees and commissions, regulation, payments, investment tools, and customer support.

To ensure you choose the best CFD broker for your financial goals – be sure to read the reviews outlined below!

1. eToro – Overall Best CFD Broker 2021

etoro logo

If you’re looking for the overall best CFD broker for 2021 – look no further than eToro. This top-rated platform gives you access to thousands of markets – including stocks and ETFs from 17 international exchanges. You can also trade forex, indices, and commodities.

Regarding the latter, this includes hard metals like gold and silver, agricultural products such as wheat, sugar, and corn, and even oil and natural gas. If you’re planning to trade cryptocurrencies, eToro offers a huge selection. This includes major coins like Bitcoin and Ethereum as well as more speculative projects like Dogecoin, Decentraland, and Aave.

etoro review

All of the aforementioned CFD instruments can be traded with leverage, even for day trading. You will also have the option of going long or short on your chosen market. When it comes to fees, stocks and ETFs can be traded on a commission-free basis. All other assets are priced on a spread-only basis, meaning you simply pay the difference between the buy and sell price.

If you are exploring CFD instruments for the very first time, you might find the eToro Copy Trading tool of interest. In a nutshell, this allows you to select a seasoned trader that uses the eToro platform and then copy their buy and sell orders like-for-like. For example, if the trader goes short on a gold CFD, you will do the same. This feature requires a minimum investment of just $500 and it comes with no additional fees.

etoro review

In terms of getting started, you can easily open an eToro account by providing some basic personal information. You can elect to use the free demo trading facility or proceed with a real money account from the get-go. If opting for the latter, you can deposit funds with a debit/credit card, e-wallet, or bank transfer. Safety should be of no concern at eToro as the CFD broker is regulated by the FCA, ASIC, and CySEC.

Pros:

  • Heavily regulated trading platform used by over 20 million people
  • 0% commission on stocks and ETFs
  • Spread-only pricing structure on crypto, indices, forex, and commodities
  • Very easy to use – ideal for beginners
  • The minimum stake starts at $25 per trade
  • Supports debit/credit cards, bank transfers, and e-wallets
  • Copy Trading features promote passive investing

Cons:

  • Charting analysis tools are a bit basic

67% of retail investors lose money trading CFDs at this site

 

2. Capital.com – Best CFD Broker for Beginners ($20 Minimum Deposit)

capital.com reviewAs we explain in more detail later in this guide, CFDs are complex financial derivatives. Therefore, if you’re somewhat inexperienced in this space, you might want to choose a beginner-friendly CFD broker like Capital.com.

In order to get started, you only need to meet a $20 minimum deposit – which is great for newbies. Alternatively, you can start off with the free demo trading account – which allows you to place buy and sell positions in live market conditions without risking any money. Either way, the CFD trading platform at Capital.com is super easy to use and there is no requirement to download any software.

capital.com review

Instead, you simply need to log in and you can start trading CFDs directly in your web browser. In terms of supported markets, there are thousands to choose from at Capital.com. This includes stocks, ETFs, indices, cryptocurrencies, forex, hard metals, energies, agricultural products, and more. Each and every financial instrument at Capital.com can be traded with leverage and at a 0% commission rate.

When trading major assets – such as blue-chip stocks, gold, or oil – you will often find that the spreads are industry-leading. There are no deposit, withdrawal, or platform fees either. You can easily deposit funds with a debit or credit card, bank transfer, or e-wallet. The platform is authorized and regulated by two reputable financial bodies – the FCA and CySEC.

Pros:

  • 0% commission and tight spreads
  • Thousands of markets on offer
  • CFD asset classes include crypto, stocks, forex, and commodities
  • Minimum deposit of just $20
  • Supports debit/credit cards and e-wallets
  • Great for beginners
  • Metatrader 4 supported
  • Leverage available – limits depend on your location

Cons:

  • You can’t invest in the underlying asset – CFD instruments only

67.7% of retail investor accounts lose money when trading CFDs with this provider

 

3. Libertex – Best CFD Broker for Low-Cost Trading

libertex reviewFees, spreads, and commissions should be near the top of your list when searching for the best CFD broker. In this respect, Libertex is a great option as the platform allows you to trade CFDs in a super low-cost manner. First and foremost, this CFD broker doesn’t charge any spreads at all.

This is the case across all of its supported CFD markets – so you’ll also get the best rates available. In terms of commissions, this is charged on the vast majority of markets at Libertex. However, the actual rate is typically minute. For example, major forex pairs start at a commission of just 0.006% per slide. libertex review

When you combine this with the broker’s ZERO spread policy and fee-free deposits and withdrawals, Libertex is arguably one of the cheapest CFD trading platforms in the online arena. When it comes to markets, Libertex offers thousands of stocks, ETFs, indices, cryptocurrencies, commodities, and forex instruments. You can go long or short on your chosen market and of course – apply leverage.

Much like eToro and Capital.com, Libertex offers a free demo account facility to all registered users. You can choose from three trading platforms too – which is inclusive of MT4 and MT5. If you’re a newbie, you might prefer the native Libertex platform which you can access via your web browser. There is also a Libertex trading app which is great for buying and selling CFD instruments on the move.

libertex review

In terms of reputation, Libertex has a long-standing track record in the CFD trading space – with more than 20 years of brokerage services. The platform is regulated by the CySEC and the FSCA and keeps all client funds in segregated bank accounts. You can get started with a minimum deposit of $100 and supported payment types include debit/credit cards, e-wallets, and a bank transfer. All future deposits can be made from just $10.

Pros

  • ZERO spreads on all markets
  • Low trading commissions
  • Mininmum deposit of just $100
  • Supports CFD instruments on stocks, crypto, ETFs, forex, commodities, and more
  • Debit/credit cards and e-wallets accepted
  • Heavily regulated and more than 20+ years in the trading space
  • MT4 and MT5 supported
  • Negatrive balance protection

Cons

  • CFD instruments only – no traditional ownership

83% of retail investor accounts lose money when trading CFDs with this provider

 

4. AvaTrade – Best CFD Broker for MT4

avatrade brokerAlthough MT4 is typically associated with traditional forex trading – it’s also highly conducive for CFD instruments. Notably, if you have a bit of experience in the trading scene – MT4 offers all of the tools that you will need to consistently outperform the market.  

The best MT4 broker that we came across is AvaTrade. Not only is the broker highly trusted in the CFD trading arena but it is regulated in six different jurisdictions. Upon linking your AvaTrade account with MT4 – which can be accessed online or via desktop software, you will be able to trade more than 1,250+ CFD instruments without paying a single cent in commission.

avatrade best forex broker

Instead, AvaTrade builds all trading fees into the spread. This is usually very tight – with the likes EUR/USD attractive a spread of just 0.9 pips. On top of forex, you can also trade individual stock CFDs, indices, digital currencies, precious metals, and energies. When trading these financial instruments via the MT4 platform – you will have access to plenty of technical indicators and chart analysis tools.

You can also install an automated trading robot when using MT4 – and AvaTrade has no issues with scalping or hedging strategies. Like all the CFD trading sites we are discussing today, AvaTrade offers leverage on all supported markets. You can get started by making a deposit with your debit/credit card or transferring funds from your bank account. The minimum deposit stands at just $100.

Pros:

  • Regulated in 6 different jurisdictions
  • Supports CFD markets on forex, stocks, cryptocurrencies, and more
  • 0% commission and low spreads
  • Compatible with MT4 and MT5
  • Minimum deposit of just $100
  • Leverage offered on all markets

Cons:

  • Stock CFD department is limited in comparison to other platforms

71% of retail investor accounts lose money when trading CFDs with this provider

 

5. Vantage FX – Best CFD Broker for High Leverage

vantagefx logo

As we have mentioned several times within our reviews of the best CFD brokers – contracts-for-differences and leverage go hand-in-hand. If you’re in the market for a high leverage broker specifically – then Vantage FX is well worth considering.

In a nutshell, this top-rated CFD broker allows you to apply leverage of up to 1:500 – meaning you can amplify your stake by a factor of 500 times. With that said, Vantage FX offers a lot more than just high leverage limits. For example, this forex broker allows you to open an ECN account with ease – even if you are a retail client. This means that you can access market-leading spreads that start from 0 pips when trading major currencies.

vantage fx forex broker

The ECN broker accounts offered by Vantage FX require a small commission of just $3 – which is about the industry standard. Alternatively, if you are looking to trade with small amounts, the broker also offers a commission-free account. Naturally, this will come with less competitive spreads – so have a think about which account type is best for you.

In terms of supported CFD markets, Vantage FX offers everything from forex, shares, and indices to energies, precious metals, and soft commodities. You can trade CFDs at this broker via MT4, MT5, or the Vantage FX web trading platform. There is also a mobile app for those of you that wish to trade remotely. Accounts can be opened quickly at this broker and the minimum deposit starts at $200.

Pros

  • ECN broker accounts
  • Trade from 0 pips and a commission of $3 per slide
  • Regulated in various jurisdictions
  • Offers markets on forex, shares, energies, indices, and more
  • Supports MT5
  • Leverage of up to 1:500

Cons

  • Mobile app isn’t the easiest to use

Your capital is at risk when trading financial instruments at this provider

 

6. Pepperstone – Best CFD Broker for MT5 and cTrader

While many CFD traders will elect to use MT4, other third-party platforms are worth considering. For example, the likes of MT5 and cTrader both come packed with notable tools – such as technical indicators, copy trading, and live forex news.

Perhaps the best CFD broker that supported MT4 and cTrader is Pepperstone. In choosing this provider, you can trade hundreds of CFDs – which include indices, forex, shares, and commodities. We like the fact that Pepperstone offers two core account types to cover both casual and experienced traders. Regarding the former, the Standard account offers 0% commission trading and spreads that start from just 0.6 pips.

And the latter – the Raw account offers ECN-like spreads that start from 0.0 pips alongside a commission of $3. Pepperstone offers leverage on all markets as well as the option to go long or short. The broker is regulated by several reputable bodies – such as ASIC and the FCA. There is no minimum deposit to get started and you can easily deposit funds with a debit/credit card or e-wallet.

Pros

  • Highly suitable for professional clients
  • Raw Spread account offers 0 pips on major forex pairs
  • 0% commission accounts also available
  • More than 800+ financial instruments
  • Compatible with MT4, MT5, and cTrader
  • Regulated by the FCA, ASIC, and DFSA

Cons

  • No traditional investment assets supported

Your capital is at risk when trading financial instruments at this provider

 

7. IG – Best CFD Broker for Asset Diversity

If you’re the type of trader that likes to speculate on a wide variety of assets – look no further than IG. This is because the top-rated brokerage firm gives you access to over 17,000 financial instruments – all in the form of CFDs. This includes everything from forex, indices, and stocks to precious metals, bonds, and cryptocurrencies.

Apart from stock CFDs, all markets at IG can be traded at a commission rate of 0%. Stocks, however, start at 0.10% – depending on the respective exchange. When it comes to spreads, you can trade major forex pairs from just 0.6 pips and indices from 0.1 pips. Commodities are also competitive – with spreads starting at just 0.3 pips.

ig cfd trading

The minimum deposit to get started at IG is £/$ 250 and the broker supports debit/credit cards and bank account transfers. Once you are set up, you can trade via the IG website or through MT4. If you’re an advanced trader, you might consider using ProRealTime. In terms of safety, IG is heavily regulated, has been operational since 1974, and is publicly listed on the London Stock Exchange.

Pros:

  • Established in 1974 and listed on the London Stock Exchange
  • Offers CFD and spread betting markets
  • Most assets can be accessed at 0% commission
  • Forex spreads start from just 0.6 pips
  • Supports MT4
  • Offers traditional stocks and funds for UK investors

Cons:

  • More suited for experienced traders

71% of retail investor accounts lose money when trading CFDs with this provider

 

8. Skilling –   Best CFD Broker for Mobile Trading

Skilling logoMobile trading is now one of the fastest-growing investment sectors in the financial space – with more and more brokers now offering a dedicated app. In terms of user-friendliness, we found that the Skilling trading app is one of the best in the market.

This top-rated CFD broker allows you to access all account features via the app – which is inclusive of deposits/withdrawals, buying and selling instruments, checking your account balance, and more. The Skilling app – which is available on both iOS and Android, allows you to trade more than 800+ markets. This includes CFDs in the form of forex, shares, indices, cryptocurrencies, and commodities.

skilling app

When it comes to leverage, your limits will depend on where you live. For example, retail clients in the EU and Australia are capped to 1:30 – while some nationalities can apply up to 1:500. Nevertheless, all markets on Skilling can be traded at 0% commission and spreads start from just 0.1 pips. Opening an account – either online or via the app, takes minutes.

Pros:

  • More than 800 financial instruments
  • 0% commission and spreads from 0.1 pips
  • Top-rated mobile trading app
  • Great for newbies and for experienced traders
  • Supports three trading platforms – Skilling Trader, MT4, and cTrader
  • Regulated by CySEC (Cyprus) and FSA (Seychelles)

Cons:

  • Leverage limits unclear until you open an account

69.53%% of retail investor accounts lose money when trading CFDs with this provider.

 

9. Forex.com – Best CFD Broker for Liquidity and Pricing

forex.com logoForex.com is a popular online broker that is best known for its forex trading services. However, this trusted platform is also behind an extensive range of CFD instruments. In fact, across 300+ financial instruments, you can trade everything from indices and shares to hard metals and energies.

In terms of stand-out features, these are plentiful at Forex.com. At the forefront of this is that its CFD trading platform offers significant levels of liquidity and you will have access to industry-leading rates. This is especially the case if you elect to open a Direct Market Access (DMA) trading account. In doing so, you will have access to the same liquidity and pricing levels as obtained by global banks and financial institutions.

best forex brokers forex.com

In simple terms, this means that you will pay nothing in spreads when trading currency CFDs. Plus, the commission on the DMA account amounts to just $60 per $1 million traded. This does go as low as $20 but you would need to trade a significant amount throughout the month to be eligible for reduced pricing. In terms of safety, Forex.com is regulated in multiple jurisdictions – including the US, UK, Canada, and Australia.

Pros

  • Great forex broker for US traders
  • 1:50 leverage on major forex pairs
  • Multiple account types available
  • Trade online or via MT4/MT5
  • More than 80+ pairs supported
  • Permits automated trading

Cons

  • US clients do not have access to guaranteed stop-loss orders

Your capital is at risk when trading financial instruments at this provider

 

10. Trading 212 – Best CFD Broker for Small Stakes and Casual Traders

trading 212 reviewAlthough Trading 212 is popular with those looking to buy fractional shares and or for an ETF broker, the platform also offers a comprehensive CFD department. In particular, Trading 212 is suitable for CFD traders that wish to place stakes with casual amounts.

This is because you can enter a position from just $1 upwards. Sure, you won’t be able to make comprehensive profits with such small stakes, but this at the very least, allows you to get to grips with CFD trading without risking too much money. Additionally, Trading 212 also offers a free CFD demo account. In fact, unlike other CFD brokers, there is no requirement to register to gain access to the paper trading facility.

trading 212 review

Once you are set up, you will have access to thousands of stock CFDs from several UK, US, and European exchanges. You can also trade commodities, indices, and forex. All markets can be accessed with leverage – and limits are capped to 1:30. Trading 212 allows you to trade CFDs on a commission-free basis. However, if trading a market that is priced in a currency that is different to your account – a 0.5% fee applies.

Pros

  • Trade from just $1 per stake
  • Supports forex, ETFs, stocks, indices, and commodities
  • CFDs and traditional investment assets
  • Regulated by the Financial Conduct Authority
  • 0% commission
  • Very easy-to-use platform

Cons

  • 0.5% fee on CFD instruments priced in a currency that is different form your account

69.53%% of retail investor accounts lose money when trading CFDs with this provider.

 

CFD Brokers Fees Comparison

Below you will find a fee comparison table for all of the CFD brokers that we have reviewed. Take note, these fees are based on a standard account. As such, if you want access to more competitive spreads, you’ll need to open a specific ECN/Raw account – if offered by the broker in question.

CFD Broker Commission Spread on EUR/GBP Spread on Amazon CFDs Spread on Oil CFDs
eToro Spread Only From 1 Pip From 0.09% From 5 Pips
Capital.com 0% From 0.8 Pips Variable Variable
Libertex From 0% ZERO ZERO ZERO
AvaTrade 0% From 0.9 Pips From 0.13% $0.02 Over Market
VantageFX 0% From 1.4 Pips Variable Variable
Pepperstone 0% From 0.6 Pips 0 + Market Spread From 2 Pips
IG 0% (Stocks 0.1%) From 0.6 Pips Shares From 0.1 Pip Commodities From 0.3 Pips
Skilling 0% Variable Variable Variable
Forex.com 0% From 1 Pip From 1 Point From 0.04 Points
Trading 212 0% (0.5% FX Fee) Variable Variable Variable

Where the above table states ‘variable’ – this is because the CFD broker does not have a minimum spread in place. Instead, the broker utilizes a variable spread system that is dictated by current market conditions.

What are CFDs?

In a nutshell – CFDs (contracts-for-differences) are financial instruments that are offered by hundreds of online brokers. The main concept is that the CFD instrument allows you to trade seamlessly without needing to own or store the respective asset.

Instead, CFDs will track the actual price of the asset in real-time. As a result, you can speculate on the future value of the asset in the same way as buying it in the traditional sense.

  • For example, if the spot price of gold is currently $1,760 – the CFD instrument will also trade at the same value.
  • Naturally, if the value of gold increases to $1,820 – as will the CFD.
  • As a result, if you thought that the price of gold was due to increase, it would just be a case of placing a buy order on a CFD instrument.
  • With that said, CFDs are much more conducive for investing in hard assets like gold – as you place orders without needing to worry about storage.

After all, buying gold in the traditional sense – this would be a logistical nightmare – especially when it comes to cashing out. But, in the case of CFD instruments – all you need to do is place a buy or sell order to enter the market and the broker will execute your position.

etoro commodities

As we cover in more detail in the sections below, there are many other benefits of using a CFD broker to trade online. For example, you can apply leverage to CFDs at the click of a button – subsequently allowing you to trade with more than you have in your account.

Plus, by placing a sell order with your chosen CFD broker, you can go short on an asset if you think its market value will decline. And of course – as you are only trading a financial instrument as opposed to owning the asset – the best CFD brokers will often charge a commission rate of 0% alongside tight spreads.

Why Trade CFDs?

As we briefly covered in the section above, there are many benefits of trading with a top-rated CFD broker.

Below we explore these core benefits in great detail:

Leverage

First and foremost, CFDs are leveraged financial instruments. This means that you can trade your chosen CFD asset with more money than you have in your brokerage account.

For example:

  • Let’s suppose that you want to go short on oil – which is priced at $70 per barrel
  • You have $100 in your CFD trading account – but apply leverage of 1:20
  • This means that you are effectively entering a trading position worth $2,000
  • When you close the trade – the price of oil is worth $60 per barrel
  • This means that you have made gains of just over 14%
  • On your original stake of $100 – this would have amounted to a profit of $14
  • However, as you applied leverage of 1:20 – that $14 profit is amplified to $280

In terms of how much leverage you can apply, this depends on a variety of factors. For example, the best CFD brokers will give you more leverage when trading major forex pairs and less on other assets – such as stocks or cryptocurrencies.

Plus, leverage limits are also dictated by where you live. While some nationalities have no limits at all, those based in regions like Europe Australia, and UK are capped to 1:30.

Range of Markets

By choosing a traditional broker to buy and sell assets   – the range of markets that you have access to will be limited. For example, you will likely be able to buy stocks, ETFs, mutual funds, and bonds. But, when it comes to alternative assets like oil, gold, silver, and indices – things get a bit more complicated.

As we mentioned earlier, purchasing bars of gold is not a conducive way to deploy a trading strategy. But, when trading a gold CFD, it’s just a case of placing a buy or sell order with your broker. For example, when using eToro, you will have access to thousands of CFD markets.

etoro indices

This includes stocks from 17 international markets, ETFs, cryptocurrencies, Defi coins, agricultural products, energies, hard metals, and more. As such, you can access the same financial markets as hedge funds and big banks without needing to leave your home.

Long or Short

Another key benefit that the best CFD brokers offer is the ability to go long or short. This means that you have the chance to profit from rising and falling price movements. For example, you might look at the stock markets and see that they are going through a bearish period.

how do i short the dow jones

As such, you might decide to place a sell order on the Dow Jones with your chosen CFD broker – meaning that you think the index will fall in value. On another day, you might think that the stock markets are about to reverse and enter a bullish period. Therefore, you can then place a buy order on the Dow Jones.

Low-Cost Trading

CFDs are created by online brokers and they are simply tasked with tracking the real-world price of an asset. As a result, the costs involved from the perspective of the broker are minute. This means that in many cases, the best CFD brokers allow you to trade in a super low-cost manner.

For example, eToro operates on a spread-only basis, so you only need to cover the difference between the buy and sell price. Capital.com offers all markets on a 0% commission basis while Libertex charges ZERO spreads across the abord.  In comparison, buying traditional assets can be costly.

In many cases, you need to pay a flat commission to buy stocks, ETFs, and mutual funds. This means that by placing small stakes, your profit potential will get eaten up by fees. But, when trading CFDs, you’ll benefit from a low-cost pricing structure irrespective of how much you are staking.

How to Choose the Best CFD Broker for You

Due to the rising popularity of CFDs in the retail investment space – there are now hundreds of brokers that give you access to this financial instrument. However, this can make it difficult to know which CFD broker is right for you.

To ensure you choose the best CFD broker for your financial goals – consider the following metrics:

Regulated

CFDs are complex financial instruments – so this segment of the trading arena is heavily regulated. It’s, therefore, best to stick with CFD brokers that are authorized and licensed by a reputable body. For example, eToro is regulated by   ASIC, CySEC, and the FCA. This will ensure your capital remains safe at all times.

Markets

Some CFD brokers only offer a few hundred markets while others offer thousands. For example, although Forex.com is a top-rated broker, it only offers CFD instruments of 300+ markets.   At the other end of the scale, you have IG – which offers more than 17,000 CFDs.

The most important thing is that your preferred asset classes are supported.   For example, if you see yourself as a stock trader, then you will have to choose a CFD broker that offers plenty of share markets across numerous exchanges.

etoro trade stocks

At eToro, for instance, you can trade more than 2,4000 stock CFDs from 17 international markets. You can normally check what markets are supported by visiting the CFD broker’s website.

Trading Tools

The best CFD brokers offer a number of tools that can help you make smart trading decisions. This includes technical indicators, access to third-party platforms like MT4 and MT5, fundamental analysis and market insights, and even passive investment features.

Regarding the latter, eToro offers a Copy Trading tool that allows you to buy and sell CFD instruments without needing to do any research. All you need to do is choose a successful trader that you like and then you can automatically copy all of their ongoing positions.

Deposits and Withdrawals

Be sure to check what payment methods are supported at your chosen platform. The best CFD brokers will support instant payment methods that allow you to start trading in minutes.

For example, eToro and Capital.com both support debit and credit cards issued by Visa and MasterCard. Both of the aforementioned platforms also support a number of e-wallets. Additionally, you need to check what the minimum deposit amount is and whether any fees apply.

Finally, do some research to see how long withdrawals take to process. We found that the best CFD brokers will authorize withdrawals within 24 hours of you making the request.

How to Get Started with a CFD Broker

If you have never traded CFDs before – we hope that this comprehensive guide has helped clear the mist. To conclude, we are now going to walk you through the process of getting started with a CFD broker from the comfort of your home.

For this tutorial, the steps provided will show you the process with eToro – which we believe is the best CFD broker in the market.

Step 1: Open an eToro Account

eToro offers a standard account to all users – so you simply need to visit the provider’s website and click on the ‘Join Now’ button. When prompted, enter your information – which includes your name, nationality, date of birth, and contact details.

etoro sign up

67% of retail investors lose money trading CFDs at this site

On the next page of the registration process, eToro will ask you to upload a copy of your ID. You also need to prove a recently issued utility bill or bank account statement. This part of the process is called KYC (Know Your Customer) and it is a legal requirement for all regulated CFD brokers.

Step 2: Deposit Trading Funds

You will need to meet a minimum deposit of $200 to start trading CFDs at eToro. The best payment methods supported by the broker are debit/credit cards, Paypal, Skrill, or Neteller – as these are processed instantly.

Step 3: Search for CFD Trading Market

If you know which CFD instrument you want to speculate on – search for. As you can see from the example below, we are searching for ‘Oil’.

trade oil etoro

When you see the correct CFD instrument load from the search box, click on the ‘Trade’ button.

Step 4: Place CFD Trading Order

eToro will now ask you to complete a CFD trading order. This is so the broker knows what position to execute for you.

trade oil etoro

67% of retail investors lose money trading CFDs at this site

The main fields that you need to complete are:

  • Buy or Sell: This determines whether you think the CFD instrument will rise (buy) or fall (sell) in value
  • Amount:  This is the amount of money (in USD) that you want to risk on the CFD trade
  • Leverage: If you want to apply leverage – select your ratio (e.g. 2x, 10x)
  • Stop-Loss and Take-Profit:  These orders allow you to specify the price that you want your trade closed at when you hit a profit target (take-profit) or the position goes down by a certain amount (stop-loss).

Finally, confirm your CFD order by clicking on the ‘Open Trade’ button.

eToro – Best CFD Broker 2021

This guide has discussed the many benefits of speculating on CFDs – including the ability to apply leverage, choose from a buy or sell position, and trade with super low fees, commissions, and spreads. You do, however, need to choose the best CFD broker for your needs.

We found that eToro is the overall best CFD broker in the market right now for several reasons. Not only is the broker heavily regulated and used by over 20 million people, but you can trade thousands of CFD instruments on a spread-only basis.

You could have your first CFD trading order executed in less than 10 minutes by quickly opening an account with eToro opting for an instantly-process payment method – such as a debit/credit card or e-wallet!
etoro logo

67% of retail investors lose money trading CFDs at this site

 

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