CFD Brokers

CFD Brokers 2017

CFD stands for Contract-for-Difference. A CFD is an agreement between the buyer and seller of an asset to exchange the difference in the current value of a stock, commodity, currency or index and its value at the end of the contract. If the difference is positive, the seller pays the buyer. If it is negative, the buyer will have to pay the seller and ends up losing money.

Our Top 5 CFD Brokers in 2017:

Take a look below for our recommended CFD companies this year. We take into account a range of criteria when publishing our reviews.

1
Min. Deposit
$10
Exclusive promotion
Our score
10
55+ currency pairs available
Trade on a trusted platform
24/7 support via live chats, email or phone call
Start Trading
Description:
LonghornFX is a true ECN STP broker dedicated to delivering a superior trading experience to traders no matter their level of experience. Their services are based on transparency, innovation and efficiency, ensuring an unparalleled trading experience for all.
Payment Methods
Credit Card, Debit Card, Visa, Bitcoin
Full regulations list:
LonghornFX offers high-leverage trading on a wide variety of assets. Trading with leverage carries a degree of risk which may result in losing more than your investments. Clients should practise risk management to protect themselves from losing more than they can afford when trading with leverage.
2
Min. Deposit
$10
Exclusive promotion
Our score
9.3
0% Commission Account
Low Spreads
Eco-Account Option
Start Trading
Description:
CedarFX is an eco-conscious broker offering 0% commission trading on 170+ assets, including Forex, Cryptocurrency Pairs, Stocks, Indices and Commodities. With up to 1:500 leverage, no-fee transactions and low spreads, traders can make the most of their funds. CedarFX also offers an Eco Account option to support tree planting and sustainability projects.
Payment Methods
Bitcoin, Credit Card, Debit Card
Full regulations list:
Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary seek independent advice.
3
Min. Deposit
$200
Exclusive promotion
Our score
8.7
Join the Social Trading revolution. Connect with other traders, discuss trading strategies, and use our patented CopyTrader
eToro is the world’s leading social trading platform, offering a wide array of tools to invest in the capital markets
Largest number of currency pairs to trade
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro offers a wide range of currency pairs and other trading instruments. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Wire Transfer, Bank Transfer
Full regulations list:
CySEC, FCA
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
4
Min. Deposit
$10
Exclusive promotion
Our score
8.5
Can fund with BTC
64 global companies including Netflix and Amazon
Free deposits and withdrawals
Start Trading
Description:
EagleFX is an online digital asset, Forex and CFD broker providing traders across the globe with cutting edge technology to trade the world’s markets. Our focus has been to change the way people trade Digital Assets and Forex. We are driven to provide traders with incredibly low-cost pricing across all Digital assets, FX, stocks, indices, commodities and futures along with industry-leading 24/7 live customer support.
Payment Methods
Credit Card, Debit Card, Bitcoin, Wire Transfer
Full regulations list:
EagleFX offers leveraged trading on a range of assets within its platform. CFD and Spot Forex trading do carry a degree of risk which may result in you losing more than your initial investment. Please ensure you fully understand the risks involved with leveraged trading and ensure this is not detrimental to your personal or institution's financial well being.
5
Min. Deposit
$200
Exclusive promotion
Our score
7.9
BlackBull Markets’ unique feature lies in its stated goal of delivering an “institutional” trading experience to retail clients
No-Dealing Desk Broker (NDD), with Straight Through Processing (STP) all done on a true ECN
State of the art Equinix servers, based in New York (NY4), London (LD5) and Tokyo (TY3)
Start Trading
Description:
BlackBull Markets is a top-tier, award-winning, and financially registered forex broker with a globally trusted presence. Operating since 2014, BlackBull Markets is now the fastest growing financial services business in New Zealand. We were founded with the goal of becoming the leading online Financial Technology and Foreign Exchange broker. BlackBull Markets is a true ECN, No Dealing Desk brokerage specializing in Forex, CFDs, Commodities, Fibre Optic Communications and Fintech solutions for a global clientele.
Payment Methods
Mastercard, Visa, Bank Transfer, Neteller, Skrill, UnionPay, FasaPay
Full regulations list:
FSPR, FMA New Zealand

Disclaimer: Your capital is at risk when using the above platforms

What are CFDs?

CFDs are leveraged derivative products and are traded on margin. So they not only allow investors to speculate on price movements without the need to own the underlying asset, but they also allow traders to control larger positions with smaller amounts of money. The profit/loss in a CFD trade is determined by the difference between the buy and the sell price.

Unlike conventional spot forex trading, CFD trading also allows owners of stock CFDs to receive cash dividends. CFDs are by nature only suited for short term speculation and long-term position trading.

CFD trading is performed via brokerage accounts designated for this purpose. These brokers charge a commission for each trade on opening and closing a transaction. Some others will add these commissions to the prices of the trade (i.e. add them to the spread), while there are others that will do both.what-is-cfd-trading

A CFD brokerage account enables a trader to participate on the short term in trading assets without the need to own those assets, especially if trading on those assets require a large amount of money to control positions. For instance, trading a stock index or a crude oil contract will require large amounts of money if traded on a conventional exchange, but trading these assets as CFDs in the form of spread bets will allow the trader to enjoy a lower level of financial commitment while gaining as if the entire contract was traded on the conventional exchange.

Types of CFD Brokers

Just like is obtainable in the forex market, CFD providers can be divided into two classes:

  1. Market makers
  2. Direct market access (DMA) providers

Some providers provide both models of brokerage in CFD trading (e.g. IG Markets), while some are either exclusively market makers or are exclusive DMA providers. Each one comes with its merits and demerits, and it is up to the trader to decide which model will work best for their business.

Market makers operate traditional spread bets where the trader must trade against the CFD provider, and on their displayed prices. Commissions and capital requirements are lower, but issues of conflict of interest will come up here.

With DMA providers, your CFD orders are sent directly to the order book. A trader may send a limit order to either buy on the bid price or sell at the ask so as to avoid paying the spread if another party hits the bid or offer price that the trader has set. DMA providers typically charge higher commissions.

CFD providers will also come with different features, irrespective of which model of operation they offer. There are differences in commission rates offered, assets traded or markets traders can participate in. It is difficult to get all the desired features in one single CFD offering and so traders may find it more rewarding to maintain accounts with several brokers so as to get a proper mix of desired features.

Choosing a CFD Broker

When choosing a CFD broker, there are certain points that the trader has to consider:

  1. Regulation: Is the CFD provided licensed to offer this service in the country of domicile? Furthermore, are there specific conditions which this broker must fulfill in terms of the way clients’ monies are handled?
  2. Margin: CFD accounts are basically margin accounts. It is good to know the margin levels and the margin rules.
  3. Commission charges: Commissions are charged on CFD trades. What are the commission charges that will accrue to the account? Remember that some CFD brokers will also build charges into the spread. You need to know what you will be paying to trade on a CFD platform.
  4. Trading Platforms: In Australia, it is also possible to trade CFDs on exchanges. Would you do exchange-traded CFDs or platform-based CFDs? If you are using an online platfrorm, ensure the platform is reliable and offers a good charting software for technical analysis.
  5. Assets/markets offered for trading: Some countries will limit what can be traded as CFDs. You need to know if your preferred market/asset is to be traded on a particular platform.
  6. Market Maker or Direct Market Access? This is a big question. Market makers offer lower entry in terms of capital requirements, charge lower interests, but will in essence be trading against you. The DMA providers will forward your orders to the order book, but will charge higher commissions and demand larger capital to trade. Which can you afford, and which do you prefer if you have a choice?
  7. Access to domestic markets and international markets: Some CFD brokers only offer domestic assets for trading. Others will give you a mixture of domestic and international assets. There are merits to each route. If you are based in the same country as the broker, you will be better served trading domestic assets. I know more about company stocks listed in my country than those traded in another country. For me, domestic assets may be the way to go. But if another trader is working elsewhere as an expatriate, he may like to get a mix of domestic and international assets so as to get a blend of both worlds.
  8. Trading Charts and Research Resources: Charts and research resources are key in conducting analysis for trades. Make sure the broker you choose will offer these.
  9. Risk Management Tools such as Guaranteed stop loss orders: The ability to manage risk is one tool which safeguards your success in the markets. Risk management tools such as guaranteed stops are a way of controlling losses when the market is in a volatile mood. This way, slippage will not dent your account. There are situations when excessive market slippage can literally pull the bottom off the bucket. Guaranteed stop losses will prevent this from happening to your accounts.

So when choosing a CFD broker, take these points into consideration and choose carefully. It is not about choosing a “good” CFD broker. It is about choosing the broker which best suits you.

Adam

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Adam is an experienced financial trader who writes about Forex trading, binary options, technical analysis and more.

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