Best CFD Brokers 2019

Kate Leaman
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CFDs stand for Contracts for Difference. They allow retail traders to speculate on the price movements of a whole array of different assets. These include currency pairs, commodities, stocks, indicies and even cryptocurrencies. A CFD broker provides a platform to the trader to be able to trade on their computer or on their mobile device. They also offer a range of tools and services, a selection of account types, deposit methods and the really good CFD brokers will offer the best trading conditions, such as low spreads. 

Below you will see our list of the most recommended CFD brokers. Our in house team of experts have comprised this list based on a number of key parameters. These are crucial factors for traders when working with a broker. They include customer experience, technology and tools and trading conditions. Take a look at our list of the best CFD brokers below.

The brokers below represent the best brokers for CFD trading.

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BrokerRatingOfficial SiteRegulationsMin DepositMax LeverageTrading PlatformsFoundation YearPublicly TradedTrading Desk TypeCurrenciesCommoditiesIndicesStocksCryptoCommission on tradesFixed spreadsoffers promotionsOfficial Site
XTB
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76% of retail investor accounts lose money

BaFin, CNMV in Spain, CySEC, FCA, IFSC

$0

1:200

MT4, xStation 5

2002

STP

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76% of retail investor accounts lose money

FP Markets
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Your capital is at risk

ASIC

$100

1:500

IRESS, MT4, MT5

2005

DMA, ECN

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Your capital is at risk

Plus500
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76.4% of retail CFD accounts lose money

ASIC, CySEC, FCA, FSB, ISA, MAS

$100

1:30

Plus500

2008

No dealing desk

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76.4% of retail CFD accounts lose money

FBS
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Your capital is at risk

CySEC, IFSC

$1

1:3000

MT4, MT5

2009

ECN, No dealing desk, STP

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Your capital is at risk

USGFX
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Your capital is at risk

ASIC, FCA

$1

1:500

MT4, MT5, Zulutrade

2005

Market Maker, STP

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Your capital is at risk

GO Markets
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Your Capital is at Risk

ASIC

$200

1:500

MT4, MT5

2006

ECN, Market Maker, No dealing desk, STP

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Your Capital is at Risk

FxPro
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Your capital is at risk

CySEC, DFSA, FCA, FSCA, SCB

$100

1:500

cTrader, MT4, MT5, Proprietary

2006

No dealing desk

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Your capital is at risk

Dukascopy
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Trading FX, precious metals and CFD on margin (i.e. using leverage) is not suitable for everyone. Investing in such instruments involves a high degree of risk of loss. Before trading on margin you should be aware of the risks involved due to the fluctuation in the value of such instruments' prices, which can cause fluctuations in the value of your investment. Any type of market or trade speculation that can yield an unusually high return on investment is subject to unusually high risks. Large losses may be suffered within a relatively short period of time due to adverse market movements or to position build-up. Before deciding to enter into FX, precious metals or CFD trading on margin, you should carefully consider your investment objectives, level of experience, and risk appetite. You should only trade the portion of your own assets you are disposed and cannot afford to lose entirely: only your surplus funds should be placed at risk and if you do not have such surplus funds you should imperatively avoid engaging in margin trading. In case of doubts on the risks related to FX, precious metals and CFD trading on margin you should consult any independent financial advisor and request any necessary information.

FCMC, FINMA, FSA(JP)

$100

1:200

Jforex

1998

ECN

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Trading FX, precious metals and CFD on margin (i.e. using leverage) is not suitable for everyone. Investing in such instruments involves a high degree of risk of loss. Before trading on margin you should be aware of the risks involved due to the fluctuation in the value of such instruments' prices, which can cause fluctuations in the value of your investment. Any type of market or trade speculation that can yield an unusually high return on investment is subject to unusually high risks. Large losses may be suffered within a relatively short period of time due to adverse market movements or to position build-up. Before deciding to enter into FX, precious metals or CFD trading on margin, you should carefully consider your investment objectives, level of experience, and risk appetite. You should only trade the portion of your own assets you are disposed and cannot afford to lose entirely: only your surplus funds should be placed at risk and if you do not have such surplus funds you should imperatively avoid engaging in margin trading. In case of doubts on the risks related to FX, precious metals and CFD trading on margin you should consult any independent financial advisor and request any necessary information.

FXCM
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70.96% of retail investor accounts lose money

AMF, ASIC, BaFin, CONSOB, FCA, FSB

$50

1:30

MT4

1999

No dealing desk

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70.96% of retail investor accounts lose money

Alpari
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Your capital is at risk

FSC

$5

1:1000

MT4, MT5

1998

ECN, STP

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Your capital is at risk

FOREX.com
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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% 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. Capital at risk

CFTC, NFA

$50

1:50

MT4, MT5

1999

Market Maker

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% 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. Capital at risk

Pro Tip: Most of these brokers offer free demo accounts so you can test the brokers and their platforms with virtual money. Give it a try with some play money before using your own cash.

Here’s a list of The Best CFD Trading Brokers 

Note: Not all Forex brokers accept US clients. For your convenience, we specified those that accept US Forex traders as clients

XTB

Regulated By:BaFin, CNMV in Spain, CySEC, FCA, IFSC

Foundation Year:2002

Headquarters:Level 34, One Canada Square, Canary Wharf, E14 5AA, London, United Kingdom

Min Deposit:$0

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76% of retail investor accounts lose money

76% of retail investor accounts lose money

XTB is an award-winning CFD platform that supports Forex, indices, commodities, stock CFDs, ETF CFDs, and cryptocurrencies. For Forex, XTB supports 48 currency pairs with low-cost spreads. Customers of XTB can choose between trading on the xStation 5 or MT4 platforms. For leverage accounts, this brokerage offers leverage of up to 200:1.

Stock and ETF CFDs all attract a fixed commission of 0.08% per lot across the two types of accounts.

XTB was founded in 2002 with headquarters in Warsaw. It is regulated in markets across Europe by the IFSC, FCA, KNF, and CySec. XTB has a free demo account and a Trading Academy set of courses for beginner and intermediate traders.

Pros: Cons:
  • Choose between two excellent trading platforms (xStation 5 or MT4 platforms)
  • A collection of 3000+ trading instruments across six asset classes
  • Low spreads
  • Fewer Forex pairs than some top competitors
  • No 24/7 support

FP Markets

Regulated By:ASIC

Foundation Year:2005

Headquarters:Level 5, Exchange House 10 Bridge St Sydney NSW 2000, Australia

Min Deposit:$100

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Your capital is at risk

Your capital is at risk

FP Markets is the brokerage arm of First Prudential Markets Pty Ltd, an Australian firm which was established in 2005. In over 14 years of brokerage operations, FP Markets has grown to become a foremost online forex and CFD broker.

The Head Office is located in Sydney, Australia. The brand has won multiple industry awards in areas like; customer service, trader education and trade execution. Here are some advantages of trading with FP Markets:

  • Over 10,000 trading instruments to choose from.
  • Modern trading platforms.
  • Low spreads on forex currency pairs.
  • Regulated brokerage conditions.
  • Multilingual and efficient customer support

Plus500

Regulated By:ASIC, CySEC, FCA, FSB, ISA, MAS

Foundation Year:2008

Headquarters:Building 25, MATAM, Haifa, Israel

Min Deposit:$100

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76.4% of retail CFD accounts lose money

76.4% of retail CFD accounts lose money

Plus500 is a leading CFD trading platform with support for stocks, indices, cryptocurrencies, and Forex. This commission-free brokerage charges very low spread-rates and offers fast trades on a great platform. Plus500 supports complex trades, includes negative balance protection, and makes trading an educational and hopefully profitable venture.

You can start with a free demo account to test the platform and any trading strategy. Real money accounts offer leverage of up to 1:30. This broker is based in Israel and regulated by the Financial Conduct Authority (FCA) in the UK.

Pros: Cons:
  • Support for 2000+ products to trade across global markets,including Forex, commodities, shares, indices
    and cryptocurrency CFDs
  • No commission and low spread costs
  • Advanced trades and fast execution
  • Licensed in several regulatory hubs, and publicly listed
  • Only CFDs, no direct Forex trades
  • High rates on margin/leverage accounts
  • Less research data than some competitors

FBS

Regulated By:CySEC, IFSC

Foundation Year:2009

Headquarters:N/A

Min Deposit:$1

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Your capital is at risk

Your capital is at risk

FBS Markets Inc. is a Forex and CFD broker that offers its services across the globe. The company was established in 2009 and since then, the brand has grown in size, capacity and technology. It offers currency pairs, CFDs, stocks, metals and cryptocurrencies on MT4 and MT5 platforms.

FBS Markets offers 37 currency pairs, 4 metals, 3 CFDs, 4 cryptocurrencies and 32 stocks.

FBS provides the MT4 and MT5 trading platforms as WebTrader, desktop applications and mobile applications. For leverage accounts, this brokerage offers leverage of up to 3000:1.

Pros Cons
  • The broker is regulated by CySEC and the IFSC
  • Access to investor compensation in case of broker fraud
  • Comprehensive trader education
  • Good variety of research tools
  • Low capital requirements for account opening
  • Spreads are higher than many retail brokers
  • Regulation of global brand is not as robust as the EU brand
  • Leverage offered on global brand is too high (careful risk management is a must)

USGFX

Regulated By:ASIC

Foundation Year:2006

Headquarters:Level 22, 600 Bourke Street, Melbourne, VIC 3000, Australia

Min Deposit:$200

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Your Capital is at Risk

Your Capital is at Risk

The broker offers to trade on 62 tradable assets across Forex, Metals, Energies and Indices. Clients can choose from four different account types called Mini Account, Standard Account, VIP Account and Pro-ECN Account. Clients can also trade on the globally recognised MetaTrader 4 and 5 trading platforms for Windows, Mac, Web, Android and iOS operating systems as well as through social trading platforms ZuluTrade and myFXbook.

Clients of USGFX can also benefit from free access to Trading Central’s technical analysis service and Featured Ideas, as well as access the USGFX TradersClub Program which offers education, market research and commentary, premium trading tools and personalised coaching from their Senior Analyst, Rob Clayton.

Pros:

Cons:

  • ASIC regulated with segregated client funds.
  • Can trade on MetaTrader 4 and 5.
  • Free access to Trading Central and Featured Ideas services.
  • Personalised coaching via the USGFX TradersClub education program.
  • Limited range of instruments.
  • No Stocks and soft Commodities
  • Advertised spreads are higher than most.
  • Knowledge of live chat support agent below par.

GO Markets

Regulated By:ASIC

Foundation Year:2006

Headquarters:Level 22, 600 Bourke Street, Melbourne, VIC 3000, Australia

Min Deposit:$200

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Your Capital is at Risk

Your Capital is at Risk

GO Markets Pty Ltd an ASIC regulated broker has been in operation since 2006. The head office is located in Melbourne, Australia.  GO Markets offers forex, share CFDs, indices, metals and commodities for trading on the MT4 and MT5 trading platforms.

It offers over 250 forex/CFDs assets for trading on its MetaTrader platforms and the maximum leverage offered on all accounts is 1:500. A dedicated account manager is assigned to all account holders. The account currencies are AUD, USD, EUR, GBP, NZD, CAD, SGD, CHF and HKD.

Pros Cons
  • GO Markets is a regulated brokerage entity, which is a factor that ensures transparent trading conditions.
  • Ultra fast trade executions courtesy of innovative technology and powerful servers located in London.
  • Availability of trading and analysis tools like Autochartist and Trading central.
  • Clients’ fund segregation.
  • Demo accounts expire after 30 days.
  • Clients from over 35 countries are not accepted, which is a lot.
  • No traders’ contests, welcome bonus and other promos.
  • Only two account types available for all traders.

FX Pro

Regulated By:CySEC, DFSA, FCA, FSCA, SCB

Foundation Year:2006

Headquarters:13-14 Basinghall str., City of London, EC2V 5BQ, UK

Min Deposit:$100

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Your capital is at risk

Your capital is at risk

FxPro gives you access to a buffett of trading platforms. Choose between MT4, MT5, cTrader Pro, and FxPro Edge. As the name implies, FxPro Edge is made specifically for foreign exchange. Most orders on FxPro are executed within 13 milliseconds. FxPro is currently in beta, meaning it is a new app and may have some bugs.

If you are willing to give it a try, you’ll find an impressive set of tools for spread betting with tighter spreads than you typically get at the other FXPro platforms. Beginners can start with a risk-free demo account.

Pros  Cons
  • Support for four platforms
  • Proprietary FXPro Edge platform with lower spreads
  • Great options for beginner to advanced traders
  • Login required for demo
  • Higher spreads on MT4 and MT5
  • No signup bonus

Dukascopy

Regulated By:FCMC, FINMA, FSA(JP)

Foundation Year:1998

Headquarters:Dukascopy Bank SA Route de Pré-Bois 20 ICC, Entrance H 1215 Geneva 15, Switzerland

Min Deposit:$100

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Trading FX, precious metals and CFD on margin (i.e. using leverage) is not suitable for everyone. Investing in such instruments involves a high degree of risk of loss. Before trading on margin you should be aware of the risks involved due to the fluctuation in the value of such instruments' prices, which can cause fluctuations in the value of your investment. Any type of market or trade speculation that can yield an unusually high return on investment is subject to unusually high risks. Large losses may be suffered within a relatively short period of time due to adverse market movements or to position build-up. Before deciding to enter into FX, precious metals or CFD trading on margin, you should carefully consider your investment objectives, level of experience, and risk appetite. You should only trade the portion of your own assets you are disposed and cannot afford to lose entirely: only your surplus funds should be placed at risk and if you do not have such surplus funds you should imperatively avoid engaging in margin trading. In case of doubts on the risks related to FX, precious metals and CFD trading on margin you should consult any independent financial advisor and request any necessary information.

Trading FX, precious metals and CFD on margin (i.e. using leverage) is not suitable for everyone. Investing in such instruments involves a high degree of risk of loss. Before trading on margin you should be aware of the risks involved due to the fluctuation in the value of such instruments' prices, which can cause fluctuations in the value of your investment. Any type of market or trade speculation that can yield an unusually high return on investment is subject to unusually high risks. Large losses may be suffered within a relatively short period of time due to adverse market movements or to position build-up. Before deciding to enter into FX, precious metals or CFD trading on margin, you should carefully consider your investment objectives, level of experience, and risk appetite. You should only trade the portion of your own assets you are disposed and cannot afford to lose entirely: only your surplus funds should be placed at risk and if you do not have such surplus funds you should imperatively avoid engaging in margin trading. In case of doubts on the risks related to FX, precious metals and CFD trading on margin you should consult any independent financial advisor and request any necessary information.

The broker offers a wide variety of services and features that are designed for both beginner and professional traders. This includes access to Forex ECN trading through the Swiss FX Marketplace (SWFX), CFD trading on Stocks, Indices, Commodities and Cryptocurrencies, as well as access to Binaries trading.

Clients of Dukascopy have access to the broker’s advanced, proprietary trading platform JForex and MetaTrader on Web, iOS and Android operating systems. The broker also provides an impressive range research trading tools including their own Dukascopy TV, a wide variety of trading contests and bonuses and – by request – access to 1:200 leverage.

Pros Cons
  • 600+ tradable assets include Forex ECN trading.
  • Strong regulation under a Swiss banking licence and by Japan’s FSA and European FCMC.*
  • Access to high leverage of 1:200
  • Professional proprietary trading platform, JForex.
  • Wide range of market research tools, trading contests and bonuses.
  • Educational resources and products are limited.
  • Higher min. deposit of $1,000 (but can use Dukascopy Europe for $100 min. deposit).

*Dukascopy Japan K. K., Dukascopy Bank’s subsidiary.

FXCM

Regulated By:AMF, ASIC, BaFin, CONSOB, FCA, FSB

Foundation Year:1999

Headquarters:0 Gresham Street, 4th Floor, London EC2V 7JE, United Kingdom

Min Deposit:$50

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70.96% of retail investor accounts lose money

70.96% of retail investor accounts lose money

FXCM Group is an international online forex and CFD brokerage brand. Founded on 1999, The company is based in the UK. The brokerage firm also maintains offices in several jurisdictions such as Australia and South Africa.

In terms of tradable products, FXCM offers trading in the spot forex markets, cryptocurrencies, Treasury bond (the bund) and Contract for Difference (CFDs) for market indices and commodities. Due to the new ESMA regulation, the maximum leverage offered by FXCM is now restricted to 1:30 for major currency pairs.

Pros:  Cons:
  • Regulated Broker
  • Multiple choices of trading platforms
  • Numerous free trading tools provided
  • Low minimum deposit requirement
  • Comprehensive educational section
  • Limited product portfolio
  • No longer accepts US clients after losing US regulatory license

Alpari

Regulated By:FSC

Foundation Year:1998

Headquarters:Mauritius

Min Deposit:$5

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Your capital is at risk

Your capital is at risk

Alpari has a rich history dating back to 1998. In 2014, Alpari relaunched as Alpari International which is the business name of Exinity Limited, a company that is regulated by the Financial Services Commission (FSC) of the Republic of Mauritius.

With Alpari International, users can trade on more than 250 markets via Spot, CFDs and Futures across Forex, Stocks, Indices, Metals and Cryptocurrencies, on the MetaTrader 4 and MetaTrader 5 Desktop, Web and Mobile platforms.

Pros: Cons:
  • Wide range of trading accounts, some offering commission-free trading
  • Access Forex ECN with 1:1000 leverage
  • Trade on MetaTrader 4 and MetaTrader 5 across Desktop, Web and Mobile
  • Access the Alpari Copy Trading program
  • Limited trader education
  • Non-existent research tools

Forex.com

Regulated By:CFTC, NFA

Foundation Year:1999

Headquarters:135 US Highway 202/206 Bedminster, New Jersey, 07921

Min Deposit:$50

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% 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. Capital at risk

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% 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. Capital at risk

Forex.com is a leading US foreign exchange brokerage with a clear focus on Forex, as the name implies. It claims to be the largest Forex broker in the United States. This US broker is open 24 hours a day, 5 days a week. It supports an impressive 83 currency pairs with up to 50:1 leverage.

You can get started with a demo account. With a live account, fees are competitive and you can earn a rebate with high trading volumes. It supports the MT4 platform, common for international brokerages but less common in the US. As a US commodity brokerage, it is regulated by the CFTC and a member of the National Futures Association. It was founded in 1999 and located in Bedminster, New Jersey.

Pros: Cons:
  • Large number of supported currency pairs
  • Competitive pricing and volume rebates
  • 20 years in business
  • Does not yet support MetaTrader 5
  • Operates as a market maker
  • Limited tradable assets

What are CFDs?

A Contract-for-Difference or CFD can be defined as a contract between two parties (eg. the buyer and the seller of that contract), to exchange the difference in current price of a particular asset and its price at expiration of the contract. In other words, a CFD is a trade contract entered into by a buyer and a seller, for the price difference between the opening and closing price of a trade contract in that asset to be exchanged between both parties. The differences in price are settled via cash payments (as opposed to physical delivery).

The difference between CFDs and futures contracts is as followsrr5r: in futures contracts, there is physical delivery of the asset on contract maturation. For CFDs, there is cash delivery in lieu of the physical delivery of the assets.

CFDs can be traded in both directions: traders can assume long positions if the expectation is that the expiry value will be higher than the value on contract open. In the same way, traders can go short if the expectation is for prices to fall from contract open to contract maturation.

To help you understand CFDs, we have prepared a guide with a list of key factors that can help before you start trading.

What Assets are Traded as CFDs?

In the financial markets, there are contracts in which the traded assets require physical delivery when the contracts expire. However, these same assets can also be traded in a way that traders can take positions based on the price differentials between the opening and closing price of the contract, without physical delivery of the asset. These are the Contracts-for-Difference (CFD) assets.

All the asset classes that are traded in the financial markets can be traded as CFDs: currencies, commodities, index assets, stocks, etc.

How Do CFDs Work?

The following narrative shows how a CFD trade operates.

A trader with a $50,000 account wants to go short (SELL) on the crude oil CFD at $54.20 He is given a leverage of 1:50 by his brokers. How does he trade this?

The first step is to calculate the margin required for this trade. 1:50 leverage on a Standard Lot trade (worth $100,000) means he has to come up with 100,000/50 = $2,000. This is 4% of his account size. If he goes ahead with the trade, he has two options:

  1. He may allow the contract to run its full length to expiration (1 – 3 months). If the price of crude is lower, he will calculate the price differential (in pips) and multiply it by a tick value of $10 per pip (Standard Lot) to get the profit. At maturation of the contract, the broker will close the trade automatically.
  2. He may decide to close the trade manually if the trade has moved into profit. The profit is also calculated as in (a).

Types of CFD Brokers

There are two types of CFD brokers:

  • Market makers
  • Direct Market Access (DMA) brokers (STP/ECN)

Market Makers

Market makers “make the market”. This means that they buy up large positions from liquidity providers and offer these positions to retail traders, matching selling assets to those traders with buy orders and buying positions off traders who want to sell, all through the dealing desk. This is why market makers are also referred to as counterparties to a trade. Market makers typically accept small account deposits because they have the ability to make up the liquidity deficit. They literally take the other side of the trade to you.

DMA Brokers

DMA brokers allow the traders to get pricing directly from liquidity providers without intervention from a dealing desk. This is a “direct access” mode of brokerage. DMA brokers do not accept small account deposits since they play no role in bridging liquidity gaps. The traders must have large capital to account for the liquidity required to deal directly with liquidity providers. There are two main types of DMA broker – STP and ECN.

STP

A Straight through processing broker literally passes the trades “straight through” to third party liquidity providers. He acts as a conduit between the two parties.

ECN

With an ECN broker, when you open a position on your platform the trade will automatically go through the broker’s computer to an Electronic Communication Network without the involvement of a dealing desk in the middle.

How to Choose a CFD Broker

There are certain considerations that must be made when it comes to selecting a CFD broker. These considerations border on the following points:

  • Regulation
  • Type of Platform/Trading Software
  • Account Types Provided
  • Commissions and Spreads
  • Customer Service
  • Additional Features

These are the considerations that must be made for each metric used in broker selection.

  • Regulation

The issue of regulation is very important, and traders should pay attention to this. Regulation of the markets and the participants is essential to maintain investor confidence, provide a level playing field for everyone and ensure that traders always get a fair deal when trading CFDs. Regulators also arbitrate in cases where complaints have been made by the trader against the broker.

Not every webpage that advertises a CFD brokerage service belongs to genuine brokers. Indeed, there have been cases of well-designed webpages which drew in clients, took money from them and disappeared. How does regulation stop these kinds of scams from occurring?

In jurisdictions where regulation of brokers is top notch, there are requirements every broker should fulfil. Some of these are as follows:

  1. Well-staffed and accessible office. Some regulators will insist on periodic, physical visits to check that there is actually a business premises for the brokerage business, staffed by qualified personnel. In Cyprus for instance, dealers working in CFD brokerages are required to have passed the CySEC I and II Licensing exam for dealers. So not only must there be a physical office, staff in such brokerages must also be licensed and captured in the regulator’s database. This ensures that those who work in such places are traceable and known to the authorities.
  2. Monthly reporting of activities to the regulators is also a must.
  3. Maintenance of segregated accounts to separate clients’ funds from that of the CFD brokerage is also mandatory. This protects the funds of traders if the broker experiences bankruptcy.
  4. The management team of CFD brokerage are to possess certain educational and professional qualifications.
  5. There are basic infrastructural requirements which must be met by CFD brokers.
  6. Any reports of infractions are usually investigated thoroughly.

All these serve to protect investors and maintain investor confidence in the CFD market. Some of the worst scams are perpetrated in countries where regulation is weak or totally absent. Many of such scam brokerages use certain incentives to lure their victims to the slaughter house. That is why traders must make sure they only use regulated CFD brokers.

  • CFD Trading Platforms & Software

There are boatloads of trading software out there. The trader should choose a broker that offers software which they will find easy to use. CFD trading on its own is challenging enough: why make it harder on yourself by using a software you find difficult to handle? There are two main categories of CFD trading platform.

Proprietary Platforms

These are developed in house by the brokerage firm or their sister company. This is often built to spec. and usually has a wide level of functionality. These platforms are often well thought out and easy to user with clear user interface. They may not have the deep level of capability of the turnkey/non-proprietary platforms. If you ‘re about to trade with a new platform you have never used, it’s worth opening a demo account to take the platform for a test drive to check that you feel comfortable working with it, and that executes trades speedily.

Non-Proprietary Platforms

These are usually developed by a trading technology company eg. CTrader, Metaquotes to offer a one-size fits all solution to traders. The brokers that use this type of platform will white label it, ie. put their branding on it and select the parameters eg. Assets they’d like to set it up with. It so happens that the most popular trading platform on the market is Metaquotes MT4 and now the next generation MT5. If you know that you like to trade with a certain platform, you can find many brokers that offer that particular platform. This gives you a wider choice of the brokers you can work with and also creates a healthy competition among the brokers.

  • CFD Trading Account Types

CFD brokers will determine what kind of accounts they provide to their traders You will find accounts for beginners, intermediate traders, advanced traders and the high net-worth traders. No two traders are the same. The needs of beginner traders are not the same with those of advanced traders. It is important to choose brokers that understand the individual needs of their clients and assign various account types to take care of the varied characteristics of their client base.

Micro Account – This is the smallest account type available and is useful for beginner traders. Usually you can access this with a very low deposit (from $50-100 and up).

Mini Account – This is a commonly used account and is used by newbies or slightly more experienced traders. You can usually access this account with a minimum deposit of $500.

Standard Account – This is the most popular account which can usually be opened by depositing $1000 and up. With this account you will get access to better trading conditions and a higher leverage.

VIP Account – This is often for institutional traders and can be opened with a $20,000 minimum starting deposit. The trading conditions and leverage on offer is much better than with the other accounts.

  • Commissions & Spreads

Market makers typically do not charge commissions for CFD trades. They only collect charges on spreads. However, some CFD market makers may collect commissions on certain assets such as crude oil or spot metals. On the other hand, direct market access (DMA) brokers usually collect commissions on both sides of the trade, i.e. for opening and closing a CFD trade.

Spreads on CFD assets are typically higher than assets traded in the currency market. Therefore, the margin required for CFD trades is also higher. Spreads, commissions and leverage will directly impact on the amount of money needed by a trader to participate in the CFD market. It is nota point to be taken lightly.

  • Customer Service

In effect the customer service or support department is the face of the company. Usually there are a number of ways to get hold of representatives – these include Live chat, email, phone and even fax. Some companies’ even welcome traders to their offices. This is a very good sign as it shows transparency. A good customer service team should be available to handle any enquiries at least 24/5. The markets are open 24 hours throughout the working week and there should always be someone available to help while you are trading. Additionally, good support means a quick response time. A good firm with enough staff will usually respond to your live chat request within one minute and to your email within the hour.

Ideally CFD brokers should have localized telephone numbers, so that no matter what country you are calling from, you will only pay the price of a local call. You would also expect support staff available in every major language of the countries that broker serves.

  • Additional Features

These cover areas like Market analysis, earnings reports, educational tools, trading tools, signal services and charting software. These tools all help the trader get a trading advantage. Most CFD brokers will now supply a library of resources. At the minimum you would expect frequently updating market analysis and an economic calendar to keep on top of the market news. Find out what additional features the broker is offering that you can take advantage of while trading.

CFD Contract Specifications

What are the contract specifications that traders will encounter when trading CFDs? Put in another way, the question here is: what are those CFD characteristics that traders will encounter when trading?

  • Minimum order size: what is the smallest lot size you can trade?
  • Leverage: how much leverage is the broker giving you? Many regulators are tightening the noose here and many brokers no longer provide leverage of more than 1:50.
  • Commission: How much commission will you pay for entering AND exiting a trade?
  • Margin Requirements: How much money will you be required to use in setting up trades?
  • Tick increment: What is the minimum change as price moves up or down?
  • Tick size: By how many points do prices fluctuate?
  • Trading hours: What hours of the day is the parent exchange on which the CFD is listed open for trading?
  • Expiration of contract: What is the expiration time of a contract? CFD expirations (barring manual closure) start at 1 month and last for a maximum of 3 months.
  • Value of one tick: How much is one tick worth?

Conclusion

In order to select the best CFD Brokers we take into account a wide variety of factors. These include the quality of software available, the trading conditions (eg. spread, leverage), and level of support when you need it. In addition to the ongoing research into the brokerage firms that we conduct, we have also collected information from our readers in the form of user reviews and ratings.

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