Best CFD Broker [2024] | Top 3 Picks

Summary: In this guide, we tackle CFD trading, look at the risks involved with this particular financial instrument, and explore and compare the offerings of the best CFD brokers, such as Plus500. 

Recommended Multi-asset Broker for Online CFD Trading

• Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange

• Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more

• Low cost investing - No commissions and tight spreads.

• Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.

• Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals

Over 24 million users since the inception of Plus500 Group

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

What are CFDs?

One of the primary advantages of trading CFDs is the ability to speculate on price movements in either direction. If traders anticipate an asset’s price to rise, they can go ‘long‘ (buy), and if they expect the price to fall, they can go ‘short‘ (sell), potentially earning a profit in both market scenarios. CFD trading is also leveraged, allowing traders to open larger positions with a relatively small initial investment. However, it’s essential to note that while leverage can amplify profits, it can also increase losses, making it crucial for traders to manage their risk effectively.

Best CFD Broker

Choosing the right CFD broker will significantly enhance your trading experience. Here are our picks for the best CFD broker: 

1. Plus500;
2. eToro;
3. Interactive Brokers (IBKR). 

1. Plus500

The standout features of Plus500 include: 

• Fast and reliable order execution; 
•  0 fees for opening/closing trades and tight spreads; 
• Advanced analytical tools and chart patterns;
• Leverage of up to 1:30; 
• Real-time quotes; 
• Convenient deposit options via PayPal, Visa, Mastercard, etc.; 
• Fast and secure withdrawals; 
• Guaranteed stop-loss orders;
• Plus500 is available in more than 50 countries and 30 languages; 
• Free and unlimited demo account. 

Recommended Multi-asset Broker for Online CFD Trading

• Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange

• Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more

• Low cost investing - No commissions and tight spreads.

• Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.

• Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals

Over 24 million users since the inception of Plus500 Group

Get Started

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2. eToro

Key features of eToro include: 

• 3,000+ financial instruments across various asset classes; 
• Low and transparent fees; 
• 0% commissions for stock and ETF trading; 
• Fractional shares; 
• Features for novices and experts;
• Access and mimic the portfolios and trades of established traders for free via CopyTrader; 
• Ready-made Smart Portfolios; 
• User-friendly, intuitive trading platforms;
• Free $100K demo account. 

Highly Rated Stock Trading & Investing Platform

• Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

• 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

• Copy top-performing traders in real time, automatically.

• eToro USA is registered with FINRA for securities trading.

30+ million Users

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

3. Interactive Brokers

Notable features of IBKR include: 

• Unmatched variety of investment assets available; 
• Global stock-trading on 90+ market centers;
• Fractional shares available;
• Extra income on lendable shares;
• Earn high-interest rates on instantly available cash; 
• Extensive selection of technical and fundamental trading tools
• Lowest financing rates for margin accounts in the industry;
• No account minimum. 

Best Platform for Worldwide Stock Trading & Investing

• Highly trusted multi-asset broker with clients in over 200 countries

• Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)

• Low commissions starting at $0 with no platform fees or account minimums

• Easily fund your account and trade assets in 26 currencies

• IBKR pays up to 4.58% interest on cash balances of $10k or more

Up to 4.58% interest on balance*

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CFDs trading costs

To ensure trading fees will not significantly erode their profits, traders must thoroughly research and understand the fee structure of a particular broker before opening an account.

Below is a list of potential fees you may encounter with CFD trading: 

• Spreads: This is the difference between the buying and selling price of an asset. Brokers might offer variable or fixed spreads, and tighter spreads mean lower trading costs; 
• Commissions: Some brokers charge a commission for each trade. It’s crucial to understand the commission structure as it can significantly affect the cost of trading; 
• Overnight financing or swap rates: Holding a CFD position overnight may incur an overnight financing fee or swap rate. This cost depends on the leverage and size of the trade and can vary from one broker to another; 
• Inactivity Fees: Some brokers charge fees for account inactivity. If you don’t make a trade within a specific period, you might have to pay this fee;
• Additional fees: Additional charges may include fees for depositing or withdrawing money from your trading account as well as fees for converting profits or losses from one currency to another. 

How to trade CFDs?

Here is a straightforward step-by-step guide to executing a CFD trade: 

• Choose a trading platform: Select a reliable CFD broker and create a trading account. Ensure the platform is user-friendly and offers a competitive fee structure;
• Prepare: Before embarking on your trading journey, prioritize learning and educating yourself about CFD trading. Understand the market trends, analysis methods, and risk management strategies by leveraging educational resources provided by your trading platform. Use demo accounts to practice and refine your strategy, ensuring you’re well-prepared before you enter the live markets;
• Do your research: Analyze the markets and decide on the asset you want to trade. Utilize both technical and fundamental analysis to predict future price movements. Keep in mind global economic events, market trends, and any other relevant information;
• Develop a trading plan: Establish your goals, risk tolerance, and exit strategy before opening a position;
• Place the order: Open the trade by choosing the asset and specifying the trade details, including the position size and whether you want to go long or short. Use trading tools like stop-loss and take-profit orders to manage risk;
• Monitor your trade: Continuously monitor your trade and the markets. Stay informed about any news or events that might impact your asset’s price, and be ready to act accordingly.
• Close the trade: Once your trade reaches your profit target or stop loss, or if you want to cut your losses or take your profits early, close your trade. Review the trade, analyze the results, and use the insights for future trades.

CFD trade example

Let’s consider Jane, a trader who believes that Amazon (NASDAQ: AMZN) stock, currently priced at $120, will rise in the upcoming days. Acting on her speculation, Jane decides to enter a CFD trade:

• Opening the position: Jane opens a CFD position by buying contracts equivalent to 100 shares of Amazon without actually owning the shares. Her total exposure is now $12,000 ($120 x 100). Jane’s broker requires a 5% margin, so she deposits $600 as the initial margin to open this position;
• Price movement: The market moves in Jane’s favor, and Amazon’s stock price increases to $130. The price difference is her profit, i.e., Profit=(New Price−Old Price)×Number of Shares; 
• Profit: Jane’s speculation was correct; she made a $1,000 profit ( ($130 – $120) x 100), excluding any broker fees or commissions.

Risks of CFD trading

Entering the world of CFD trading can be an exciting way to invest your money, with opportunities to profit from market movements in various asset classes. Before you dive in, however, make sure you are well informed about the risks: 

• Leverage: CFD trading allows you to trade on margin, meaning you can open a position with a small amount of capital. While this leverage can amplify profits, it can also magnify losses, potentially exceeding your initial investment;
• Market: CFDs are used to speculate on asset price movements. However, unexpected information, market conditions changes, or government policies can cause rapid asset price fluctuations. These can impact the returns from CFD trading, and small adverse changes may necessitate additional margin payments or result in losses;
• Liquidity and gapping: Market conditions can render a CFD illiquid, leading to additional margin calls or contract closures at suboptimal prices. Fast-moving markets might also cause gapping, where trades are executed at prices different from the agreed-upon prices, leading to lesser profits or increased losses;
• Fees: If you hold a position overnight, you may be required to pay interest on the leveraged amount, which can eat into your profits or exacerbate your losses. 

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about the best CFD broker

Recommended Multi-asset Broker for Online CFD Trading

• Reliable & Regulated by CySEC (#250/14) - Plus500 Ltd is a FTSE 250 company listed on the London Stock Exchange

• Wide range of instruments - CFDs on stocks, crypto, forex, commodities, ETFs, and more

• Low cost investing - No commissions and tight spreads.

• Transparent pricing on overnight funding, currency conversion fees, guaranteed stop orders, and inactivity fees.

• Advanced platform - Top notch analytical tools, real-time quotes, fast order execution, secure withdrawals

Over 24 million users since the inception of Plus500 Group

Get Started

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.