Best CFD Trading Brokers in May 2026

Written by Emmanuel Ifeanyi

Emmanuel Ifeanyi

Emmanuel Ifeanyi Ekwomadu is a financial content writer specialised in Forex, Stock and Crypto trading. He is the person behind most of the brokers reviews that you will find on BestBrokers.com

, | Expert Editor Eugene Lee, CFA

Eugene Lee, CFA

Eugene Lee, CFA, is an investment strategist and quantitative researcher with over two decades of experience navigating global markets. Having worked on trading and portfolio management teams covering multi-billion dollar portfolios across equities, fixed income, and derivatives.

, | Updated: May 1, 2026

The right choice of a CFD broker can make trading on margin a smooth process. Hundreds of online brokers offer this derivative instrument, so narrowing down the options can be difficult. Below, you can find the highest-rated CFD trading brokers, selected based on several ranking factors, including Trustpilot score, regulation, trading fees, the number of assets available as CFDs, leverage options, deposit methods, and withdrawal speed.

1Plus500 US

Rating: 4.2 ⭐

This content applies only to Plus500 US and clients from the United States. Trading futures involves the risk of loss.

Top Rated

2eToro

Rating: 4.2 ⭐

50% of retail investor accounts lose money

3Fusion Markets

Rating: 4.8 ⭐

74-89% of retail's CFD accounts lose money

4FP Markets

Rating: 4.9 ⭐

73.33% of retail investor accounts lose money

5BlackBull Markets

Rating: 4.8 ⭐

Trading leveraged products is risky

6Global Prime

Rating: 4.7 ⭐

74-89% of retail CFD accounts lose money

7Pepperstone

Rating: 4.4 ⭐

72.9% of retail investor accounts lose money

The BestBrokers.com team draws on years of combined experience in derivative trading to evaluate brokers rigorously. Our team compiles a list of CFD brokers that operate under authorization from established financial regulators. Each of the companies listed below is regulated in its operating jurisdictions.

Each recommended CFD platform is reviewed for security, transparent pricing, and compliance with the investor protection requirements of established financial regulators.

Best CFD Brokers

1. TRADE NOW READ REVIEW

   

   4.8/5
   1. Fusion Markets

   Min Deposit

   $0

   Max Leverage

   1:30 for Australia (retail), 1:500 for professionals and VFSC retail clients

   Spreads Starting from

   0.00 pips for Zero Accounts, 0.9 pips for Classic Accounts

   Other Derivative Products

   CFDs only

   Country Restrictions

   New Zealand, the USA, Congo, North Korea, Sudan, Somalia, Syria, Myanmar, Yemen, Palestine, Iraq, Afghanistan, Iran, Japan, Ontario, Russia, Spain, Ukraine

   Regulators

   VFSC (Vanuatu), ASIC (Australia), FSA (Seychelles)
   Risk Warning: Gleneagle Asset Management Limited (ABN 29 103 162 278) trading as Fusion Markets, is the issuer of the Fusion Markets Products described in this communication. Trading in Fusion Markets Products involves the potential for profit as well as the risk of loss which may vastly exceed the amount of your initial deposit and is not suitable for all investors. You should read all of these Financial Product Service Terms, the Product Disclosure Statement (PDS) and the Financial Services Guide (available on our website) carefully, consider your own financial situation, needs and objectives for investing in these Fusion Markets Products and obtain independent financial advice.

   Fusion Markets is a Contracts for Difference (CFD) brokerage that primarily targets clients from Australia. It was established in 2017 by a group of forex veterans with over fifty years of combined experience. Launched two years later in 2019, the Melbourne-based firm provides over 250 CFDs across all asset classes. You can find leveraged contracts for more than 90 fiat currency pairs, commodities, equity indices, and shares of 100 of the largest US-listed companies.

   CFD trading is possible via Zero and Classic accounts, neither of which has any minimum deposit requirements. Zero Account spreads start at 0 pips, while Classic Account spreads include an added 0.9-pip markup. Leverage ratios depend on the underlying assets’ volatility, account type, and jurisdiction. Under Australian Securities and Investments Commission (ASIC) regulations, retail traders can use maximum leverage of 1:30 for major forex pairs and 1:20 for minors, exotics, and gold.

   Professionals and Vanuatu Financial Services Commission (VFSC) customers can amplify their positions at maximum rates of 1:500 for currency pairs and metals, provided their accounts cover the broker’s equity requirements. Fusion Markets does not offer negative balance protection to professional and VFSC clients. The Australian-focused broker provides various CFD-compatible platforms, including TradingView, cTrader, MetaTrader 4, MetaTrader 5, and the browser-based WebTrader (MT4).

2. TRADE NOW READ REVIEW

   

   4.9/5
   2. FP Markets

   Min Deposit

   $/£/50 (A$100) for Standard and Raw MT4/MT5 accounts

   Max Leverage

   1:30 for retail clients from the EU, 1:500 for professional traders and non-EU customers

   Spreads Starting from

   1.0 pip for Standard accounts, 0.0 pips on Raw accounts (minimum spreads also vary based on what asset you trade)

   Other Derivative Products

   Futures CFDs (select countries only)

   Country Restrictions

   New Zealand, Japan, USA, Belgium, Iraq, Iran, North Korea, Syria, Liberia, Libya, Yemen, Sudan, Afghanistan

   Regulators

   CySEC (Cyprus), ASIC (Australia), FSA (Seychelles), FSCA (South Africa), SCB (Bahamas), FSCM (Mauritius), CMA (Kenya)
   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.33% 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.

   FP Markets has provided regulated online trading services since 2005 under the oversight of regulators including the Cyprus Securities and Exchange Commission (CySEC) and ASIC. The company has received over forty industry awards, including for best trade execution and most satisfied client base.

   The brokerage specializes in CFDs, allowing customers to speculate on over 10,000 financial instruments. These include over 70 fiat currencies, 10,000 stocks, major global indices, metals, energies, agricultural commodities, bonds, and decentralized currencies.

   Retail clients based in the EU or Australia can maintain maximum leverage of 1:30 for less volatile instruments like forex majors. Those who meet the criteria for professional traders can leverage their positions up to 1:500 for gold, silver, majors, and minors, 1:200 for indices, 1:100 for most energies and platinum, 1:20 for shares, and 1:2 for cryptos.

   FP Markets reports low-latency order execution averaging 40 milliseconds. The brokerage offers spreads starting from zero pips with Raw Accounts. Trading at FP Markets is possible via a range of platforms, including MT4, MT5, WebTrader, and Iress Trader. Direct Market Access (DMA) and Electronic Communication Network (ECN) pricing is available, supporting more transparent prices, deeper liquidity, and full market depth.

3. TRADE NOW READ REVIEW

   

   4.8/5
   3. BlackBull Markets

   Min Deposit

   $0 on ECN Standard Accounts, $0 on ECN Prime Accounts, $20,000 on ECN Institutional Accounts

   Max Leverage

   1:500 for all forex pairs

   Spreads Starting From

   0.8 pips on ECN Standard Accounts, 0.0 pips on ECN Prime Accounts, 0.0 pips on ECN Institutional Accounts

   Other Derivative Products

   Futures for energies, indices, gold, silver, and US 10Y Treasury bonds

   Country Restrictions

   Afghanistan, Algeria, American Samoa, Belarus, Burundi, Cameroon, Canada, Central African Republic, Congo, Ivory Coast, Croatia, Cuba, Eritrea, Gaza Strip, Guam, Guinea Bissau, Iran, Iraq, Japan, Kenya, Kosovo, Lebanon, Libya, Mali, Mozambique, Myanmar, Nigeria, North Mariana Islands, Panama, Philippines, Puerto Rico, Russia, South Sudan, Sudan, Somalia, Syria, Tanzania, Ukraine, United States, US Virgin Islands, Yemen

   Regulators

   FMA (New Zealand), FSA (Seychelles)
   Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.

   Launched in 2014, BlackBull Markets offers over 26,000 CFD markets, including 70+ currency pairs, commodities, indices, stocks, and cryptocurrencies. CFD traders have access to leverage of up to 1:500 for select markets. The broker provides ECN pricing and draws quotes from multiple liquidity providers, including Barclays, Citibank, Credit Suisse, and JPMorgan Chase.

   Low-volume retail traders can open ECN Standard Accounts with no commissions, a $0 minimum deposit requirement, and spreads from 0.8 pips. More experienced customers can open ECN Prime Accounts with a minimum deposit requirement of $2,000, round-turn commissions of $6, and lower spreads from 0.1 pips. BlackBull Markets also offers institutional accounts, but these are unsuitable for retail CFD traders due to their high barrier to entry ($20,000).

   Customers can place their orders via TradingView, cTrader, MT4, or MT5. Copy trading is also supported via the in-house BlackBull CopyTrader platform. The broker is regulated by the Financial Markets Authority (FMA) of New Zealand and the Financial Services Authority (FSA) of Seychelles. Client funds are held in segregated accounts at New Zealand’s ANZ Bank. The broker generally provides negative balance protection to retail customers, although this is not explicitly stated in its legal documents.

4. TRADE NOW READ REVIEW

   

   4.4/5
   4. Pepperstone

   Min Deposit

   $10 (no obligation to fund account)

   Max Leverage

   1:30 (Retail ASIC, CySEC, FCA); 1:500 (Professional); 1:400 (CMA)

   Spreads Start from

   1.0 pips min spread on Standard Account, 0.0 pips min spread on Razor Account

   Other Derivative Products

   Spreads betting (UK), CFDs for Forex, Commodities, Currency Indices, Crypto, Shares, ETFs, Dividends for Indices, Dividends for Shares

   Country Restrictions

   Belgium, USA, Spain, Japan, South Korea, Syria, Yemen, Canada, Tunisia, Myanmar, Kazakhstan, Lebanon, Iran, Puerto Rico, Belarus, Argentina, New Zealand, Libya, Liberia, and more

   Regulators

   CySEC (Cyprus), ASIC (Australia), DFSA (Dubai), BaFin (Germany), FCA (UK), CMA (Kenya), FSA (Seychelles)
   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.5% 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.

   Pepperstone offers over 1,400 CFD instruments across various markets. The broker holds licenses from regulators including the Financial Conduct Authority (FCA), the Federal Financial Supervisory Authority (BaFin), CySEC, and ASIC.

   Spreads start from 1.0 pips for Standard account holders. Razor Accounts offer spreads from 0.0 pips with a $3.50 commission per standard lot each way. Pepperstone supports several platforms, including MT4, MT5, TradingView, and cTrader.

   The maximum leverage retail traders can access differs by jurisdiction, with the typical maximum ratio in Europe and Australia being 1:30 for retail trading accounts. Pepperstone also allows traders to apply for professional trading accounts, which can increase the maximum leverage ratio up to 1:500.

5. TRADE NOW READ REVIEW

   

   4.7/5
   5. Global Prime

   Min Deposit

   No minimum deposit requirements

   Max Leverage

   1:500 (VFSC), 1:30 (ASIC)

   Spreads Starting from

   0.0 pips (Raw Accounts), 0.9 pips (Standard Accounts)

   Other Derivative Products

   CFDs only

   Country Restrictions

   Afghanistan, Congo, Iran, Iraq, Myanmar, New Zealand, North Korea, Palestine, Russia, Somalia, Sudan, Syria, Ukraine, Yemen, Japan, USA

   Regulators

   ASIC (Australia), VFSC (Vanuatu)
   Global Prime is a trading name of FMGP Trading Group Pty Ltd (ABN 74 146 086 017) and is regulated by ASIC and licensed to carry on a financial services business in Australia under Australian Financial Services License No. 385620. Gleneagle Securities Pty Limited trading as Global Prime FX, is a registered Vanuatu company (Company Number 40256) and is regulated by the VFSC. The website is owned and operated by FMGP Trading Group Pty Ltd, ABN 74 146 086 017.

   Global Prime has operated since 2010 as an Australian forex and CFD broker. The brand has expanded its global presence to more than 160 countries. Traders can speculate on the price fluctuations of over 150 markets, including forex, crypto, indices, commodities, US stocks, and bonds, without owning the underlying asset. The broker supports the MT4 and MT5 trading platforms for desktop, mobile, and web, and plans to add TradingView.

   Global Prime operates under the regulatory oversight of ASIC (Australia) and VFSC (Vanuatu). The maximum allowable leverage across the supported asset classes depends on factors including traders’ status (retail or professional) and the entity under which they hold an account. VFSC clients have access to maximum leverage of 1:500 for forex and metals, 1:100 for indices and gold, and 1:5 for cryptocurrencies.

6. TRADE NOW READ REVIEW

   

   2.7/5
   6. XM

   Min Deposit

   $5 (Ultra Low, Zero, Standard Account), $10,000 (Shares Investing Account)

   Max Leverage

   1:30 (CySEC, ASIC); 1:1000 (FSCA, IFSC)

   Spreads Start from

   0.6 pips on Ultra Low Micro and Ultra Low Standard Accounts; 0.0 pips on XM Zero Account

   Other Derivative Products

   Stock Derivatives, Turbo Warrants for Stocks

   Country Restrictions

   Israel and USA, Canada, Iran, Russia, Yemen, Syria, Spain, Portugal, and Belgium (for European entity)

   Regulators

   CySEC (Cyprus), IFSC (Belize), ASIC (Australia), FSCA (South Africa), FSC (Mauritius), FSA (Seychelles), DFSA (Dubai)
   Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.82% 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.

   XM offers 1,400 instruments on the MT4 and MT5 platforms. Account holders can choose from a range of account types, with traders from some jurisdictions having the option to trade with a cent account. Those who wish to trade smaller amounts can also use XM’s Ultra Low Micro Account, which has a contract size of 1,000 units and a minimum trade volume of 0.1 lot (100 units).

   Traders seeking lower trading costs can consider the XM Zero Account. This account charges a commission of $3.50 per side, per standard lot, and offers spreads that can start from 0.0 pips on multiple instruments.

   XM holds licenses from regulators including CySEC, ASIC, and the Financial Sector Conduct Authority (FSCA). Residents of some jurisdictions can use negative balance protection, a tool that prevents retail traders from losing more than the balance available in their trading accounts. Leverage caps vary by regulator, with limits ranging from 1:30 for Australia and the EU to 1:1000 for clients registered under the Belize entity.

7. TRADE NOW READ REVIEW

   

   4.2/5
   7. eToro

   Min Deposit

   First-time deposit: $50 to $10,000 based on country; Subsequent deposits: $50 for EU, $10 for UK, $1 for US

   Max Leverage

   1:30 (EU, UK, MENA, Australia), 1:400 (Seychelles)

   Spreads Starting from

   1 pip for currencies, 2 pips for commodities, 0.02 pts for indices, 0.15% for stock and ETF CFDs, 1% for cryptocurrencies

   Other Derivative Products

   Futures, options (select jurisdictions)

   Country Restrictions

   Canada, Pakistan, Albania, Algeria, the Bahamas, China, Crimea, Cuba, Curacao, Egypt, Hong Kong, India, Indonesia, Japan, Kenya, Liberia, Lebanon, Macau, Moldova, Montenegro, Myanmar, New Zealand, Nigeria, Panama, Russia, Saudi Arabia, Serbia, South Africa, Tanzania, Turkey, Ukraine, Venezuela, Zimbabwe, and more

   Regulators

   ASIC, FCA, DFSA, AMF, CySEC, SEC, FSRA, GFSC, MFSA, FINRA, FSA (Seychelles), OAM, DNB (registration)
   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% 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.

   Launched by three entrepreneurs from Tel Aviv, eToro debuted in 2007 under the brand name RetailFX. The company first incorporated contracts for difference into its portfolio in 2013. It presently offers them for a broad range of 7,000+ assets, including crypto and fiat currencies, stocks, indices, energies, exchange-traded funds, and metals.

   CFD trading is available to customers from certain jurisdictions only, including Australia, the UK, and the European Union. Clients based in the United States have no access to this derivative product due to local legislative restrictions. Non-US customers who join eToro face leverage caps mandated by the European Securities and Markets Authority (ESMA) and ASIC of 1:30 for retail accounts (1:20 for non-major forex pairs and gold).

   Professional traders fall outside this limitation and have access to higher leverage maximums of up to 1:400. Customers must meet various requirements to qualify for professional accounts, including holding a financial portfolio exceeding $500,000 in value. Beyond derivative products, eToro also operates a social trading network that serves millions of traders from more than 140 jurisdictions.

   The service is available via eToro’s OpenBook platform, which enables users to copy the trades of other investors. The OpenBook platform is cross-compatible and runs smoothly on all devices. Mobile users can also access dedicated apps available free at the App Store and Google Play.

8. TRADE NOW READ REVIEW

   

   4.7/5
   8. AvaTrade

   Min Deposit

   $100

   Max Leverage

   1:30 (retail), 1:400 (professional)

   Spreads Start from

   EUR/USD: 0.8 pips (retail), 0.6 pips (pro)

   Other Derivative Products

   Vanilla options, futures

   Country Restrictions

   USA, New Zealand, Belgium, Cuba, Syria, Iran, Belarus, Russia, Yemen, Lebanon, and more

   Regulators

   ASIC (Australia), FCA (United Kingdom), FRSA (Abu Dhabi), ISA (Israel), FSCA (South Africa), FSA (Japan), CySEC (EEA), CBI (Ireland), FSC (British Virgin Islands)
   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% 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.

   AvaTrade is an online provider of derivative products, licensed by regulators including the FCA, CySEC, and ASIC. It offers copy trading services, extensive educational materials, and competitive spreads that start from zero pips for some instruments.

   Traders have access to a range of over 1,000 leveraged products, starting with CFDs for various asset classes, including forex (50+ pairs), commodities, indices, bonds, treasuries, cryptocurrencies, and shares. Other leveraged instruments clients can access include ETFs, ETNs, and futures CFDs. Trading with vanilla options is also possible at AvaTrade.

   Maximum leverage ratios for CFDs vary based on criteria such as account type, region, and asset class. Retail customers who join the FCA, ASIC, and CySEC-regulated versions of the website can access maximum leverage ratios of 1:30 for major fiat pairs, 1:20 for other pairs, gold, and major indices, 1:10 for other commodities and indices, 1:5 for shares, and 1:2 for cryptocurrencies. Clients who qualify for professional accounts at AvaTrade are exempt from these restrictions and can leverage their positions at maximum ratios of 1:400.

9. TRADE NOW READ REVIEW

   

   3.9/5
   9. ActivTrades

   Min Deposit

   • No minimum deposit requirements for the FCA, FSC, SCB, and CMVM entities
   • Customers from Brazil - R$100,000
   • Customers from China - $500

   Maximum Leverage

   • EU and UK entities: 1:30 for major forex pairs; 1:20 for minor and exotic forex pairs
   • FSC entity - Dynamic Forex leverage up to 1:1000
   • SCB entity - 1:200

   Spreads Starting from

   • Forex from 0.5 pips
   • Shares and ETFs from $0.02 per share
   • Indices and Bonds from 0.010
   • Cryptocurrencies from 0.000
   • Commodities from 0.0003

   Other Derivative Products

   • Index Futures
   • Commodities Futures
   • Commodities Spot

   Country Restrictions

   Japan, US, Canada, North Korea, Cuba, Afghanistan, Iraq, Syria, Iran, American Samoa, Libya, Congo, Belarus

   Regulations

   FCA, FSC, SCB, CVM, CMVM
   CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% 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.

   ActivTrades has more than two decades of experience in the financial industry (est. 2001) and holds licenses from several regulators, including the FCA, FSC (Mauritius), the Securities Commission of the Bahamas (SCB), and CMVM (Portugal). ActivTrades offers a market portfolio spanning 54 forex pairs, indices, shares, commodities, bonds, ETFs, and cryptocurrencies, totaling over 1,000 tradable instruments.

   The broker caters to both new and experienced traders through account types tailored to different skill levels, including Individual, Professional, and Demo accounts. Swap-free (Islamic) accounts are also available for eligible clients looking to trade CFDs interest-free. ActivTrades also provides educational resources, including webinars, seminars, and manuals.

   The broker supports a range of payment processors for deposits and withdrawals, including bank transfers, Apple Pay, Google Pay, credit and debit cards, and several digital wallet brands. Traders registered under the offshore entities can also transact with cryptocurrencies like Bitcoin, Ethereum, Tether, Ripple, and Stellar. Traders can choose between 11 base account currencies. Deposits are fee-free, except for credit and debit cards, which incur fees between 0.5% and 1.5%. Withdrawals can be processed via bank cards, bank transfers, e-wallets, and crypto, with fees only applying to USD bank transfers ($12.50).

10. TRADE NOW READ REVIEW

    

    4.2/5
    10. Axi

    Min Deposit

    $5 (UK and EU), $0 for clients from most other countries

    Max Leverage

    EU: 1:30 (retail), 1:500 (professional); St. Vincent and the Grenadines: 1:1000

    Spreads Starting from

    0.7 pips (Standard Accounts), 0.0 pips (Pro Accounts)

    Other Derivative Products

    CFDs on Forex, Indices, Crypto, and Commodities

    Country Restrictions

    Afghanistan, Belarus, Democratic Republic of the Congo, Cuba, Haiti, Israel, Iran, Korea, Libya, Myanmar, Maldives, Palestinian Territory, Russian Federation, Somalia, South Sudan, Syrian Arab Republic, Ukraine, United States Minor Outlying Islands, Saint Vincent and the Grenadines, Virgin Islands, U.S., Vanuatu

    Regulators

    ASIC (Australia), FCA (United Kingdom), CySEC (Cyprus), FMA (New Zealand), FSCA (South Africa), FSA (St. Vincent and the Grenadines), DFSA (Dubai)
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

    Axi is a CFD broker that has operated since 2007. It requires a minimum deposit of $5. Clients onboarding through the FSA-regulated entity have no minimum deposit requirements.

    The broker offers a portfolio of 290+ products. Axi operates under multiple regulatory regimes, with licenses issued by ASIC, FCA, CySEC, and the Dubai Financial Services Authority (DFSA). Depending on the Axi entity and the regulations it operates under, Axi offers maximum leverage of 1:1000.

    Besides forex, traders can access other markets supported by the broker, including shares, indices, commodities, and cryptocurrencies. Axi offers MT4 and MT5 alongside exclusive Axi tools.

Comprehensive Comparison of the Top 7 CFD Trading Brokers

The BestBrokers Approach to CFD Broker Selection

BestBrokers.com applies a comprehensive approach to CFD broker assessment and rating. The evaluation considers multiple criteria covering both the risks and the benefits of each trading site reviewed. The team tests the services of each broker listed.

The ranking system evaluates each broker across trading costs, regulation, order execution, contract diversity, payments, software, and investor protections. Individual scores are assigned for each criterion using a five-star rating. The final ranking aggregates these scores, reflecting the overall value and performance of each broker. The evaluation areas are summarized below.

1. Licensing and Regulation

   Proper licensing and regulation are important for the security of client funds, so this area is weighted carefully. The team examines who regulates each CFD broker, assigning the highest ratings to firms licensed by established regulators including ASIC, the FCA, BaFin, CySEC, and FINMA.

2. Account Types and Minimums

   BestBrokers.com considers whether the trading sites have account minimum requirements and, if so, the specific amounts. The team reviews the range of available account types to assess whether the broker meets the needs of both retail and professional traders. The review also covers the account registration process, prioritizing straightforwardness and ease of verification.

3. Account Fees and Trading Costs

   Reviewers gather data on the costs associated with trading derivatives at each brokerage, including spreads, overnight holding fees, guaranteed stop-loss fees, inactivity charges, and more. Payment-related costs are another point of interest. Brokers that offer free deposits and withdrawals score the highest in this area.

4. Trading Platforms Range

   The type of platform offered by a CFD broker can significantly affect the trading experience. The team reviews the range of available platforms, testing each to evaluate its usability and features. Team members assess the overall user experience, customization options, charting tools, timeframes, technical indicators, and more.

5. Mobile Apps and Compatibility

   Brokers that perform well in this area enable their clients to trade derivatives from smartphones or tablets. Each company’s native apps are downloaded and installed, then tested on multiple mobile devices. This allows the review team to assess overall compatibility and performance and whether the apps match the functionality of the desktop platforms.

6. Asset Classes

   Team members examine the asset classes available for trading on margin. Brokers that offer more product types earn higher scores than those that only allow leverage on forex pairs, for example. Customers should be able to leverage their positions across multiple asset categories, including commodities, shares, bonds, and cryptocurrencies.

7. Trade Execution Speed

   Reviewers study the speed of order execution at each trading site, which can significantly impact long-term trading results. They also examine how the broker routes trades for execution. Firms that provide direct access to the interbank market via ECN accounts, rather than taking the other side of client trades, generally offer greater price-feed transparency, fewer requotes, and tighter spreads.

8. Customer Support Quality

   For this area, reviewers consider various factors, including average response times, the range of communication channels, service availability, and supported languages. Prompt, professional service earns the highest marks in this category.

9. Research and Education

   Brokers that provide comprehensive educational content authored by experienced analysts achieve the highest marks in this area. BestBrokers reviewers look for information on market sentiment, free webinars, video tutorials for CFD trading, e-books, glossaries, and online courses.

10. Security and Investor Protection

    Since losses from leveraged positions can exceed an account balance, the review also covers the investor protections each CFD broker offers to retail customers. These commonly include leverage restrictions, margin close-outs, negative balance protection, and standardized warnings about the risks of CFD trading.

The Benefits of Trading with CFD Brokers

Despite the risks associated with leveraged derivatives, CFD trading can offer benefits to traders with the knowledge, skill, and experience to make informed decisions. Traders without this background should consider practicing on a demo account or reviewing the BestBrokers.com guide on CFD trading.

1. Margin and Leverage

   Contracts for difference allow traders to use margin and leverage to open large positions with a relatively small capital outlay. The deposit covers the margin requirement, and the broker effectively finances the remaining exposure. This amplifies both potential gains and potential losses.

2. Absence of Stamp Duties

   There is no need to pay stamp duty when trading this derivative instrument, because CFDs are contracts between the trader and the broker in which both parties agree to exchange the difference between the price at the opening of the contract and the price at its close. No ownership of the underlying asset is required, but capital gains taxes may still apply depending on jurisdiction.

3. No Expiration Date

   Unlike futures contracts, CFDs have no fixed expiration dates. Traders can keep leveraged positions open for extended periods as long as they pay any overnight holding fees charged by the broker. CFDs offer the flexibility to close a position at any time, whether to lock in gains or to limit further losses.

4. Long and Short Positions

   CFDs offer directional flexibility, allowing traders to go long or short and take positions on both rising and falling prices. Experienced traders often use CFDs to hedge portfolios over the short term during periods of elevated volatility.

5. Lots of Options for Portfolio Diversification

   CFD brokers offer a broad range of underlying assets, allowing traders to diversify portfolios and access multiple markets from a single account. Traders can spread risk and take positions on different market trends by speculating on the price movements of indices, stocks, currency pairs, hard and soft commodities, exchange-traded funds, treasuries, and more.

Range of Assets Available at CFD Brokers

The trading sites listed by BestBrokers.com support CFD trading across multiple asset classes, allowing clients to take positions on hundreds of instruments. The main types of underlying assets for CFD trading are forex pairs, stocks, commodities, and indices, though some brokers also allow trading cryptocurrencies and bonds on margin.

Forex Pairs

A forex pair consists of two currencies, with the first currency (the base) quoted against the second (the quote). Currency pairs fall into three categories: majors (e.g., EUR/USD, GBP/USD), minors (e.g., AUD/JPY, GBP/EUR), and exotic pairs (e.g., EUR/TRY, AUD/MXN).

Stocks

Derivatives such as CFDs allow traders to gain exposure to the stock market and speculate on share-price movements without owning any shares in the underlying company. Because CFD traders do not hold the underlying shares, they are not entitled to voting rights. Dividend adjustments, however, may be credited or debited by the broker based on corporate actions.

Commodities

The listed brokers offer access to various commodities through derivative instruments such as CFDs. The range typically includes hard and soft commodities such as gold, silver, crude oil, natural gas, sugar, and wheat. One advantage of commodity CFDs is that they generally carry lower capital requirements than equivalent futures contracts.

Indices

Indices measure the aggregate performance of groups of shares, typically tracking the largest companies listed on a given stock exchange. Well-known examples include the FTSE 100, the German DAX, and the S&P 500. They let traders gain exposure to a broad market segment through a single position.

Bonds

Bonds are debt instruments issued by governments or corporations to raise capital. Their prices are influenced by interest-rate expectations, credit quality, and supply and demand. A key feature of trading bonds with leverage is the relatively low margin requirement; some listed brokers require margins as low as 0.5% per contract.

ETFs

Exchange-traded funds (ETFs) are baskets of tradable assets bought and sold on stock exchanges through brokers. They give traders exposure to various asset classes, including bonds, currencies, commodities, and real estate. Trading ETFs via CFDs allows leveraged exposure, which amplifies both potential gains and potential losses.

Cryptocurrencies

Listed brokers offer CFDs on cryptocurrencies such as Bitcoin, Ethereum, Ripple, and Litecoin. Maximum leverage on crypto CFDs is typically significantly lower than on other asset classes, reflecting the higher volatility of these markets.

Leverage Restrictions on CFD Positions

Leverage increases position size using capital effectively extended by the broker against a margin deposit. Adverse market movements can significantly amplify losses on leveraged positions. Many financial regulators worldwide cap the maximum leverage available to retail clients to reduce the risks of CFD trading.

The caps are country-specific and do not apply to professional investors. Brokers operating within the EU and the EEA must comply with the leverage maximums introduced by the European Securities and Markets Authority (ESMA) in 2018. The ratios vary across the different asset classes based on their volatility level as follows:

• 1:30 for major currency pairs
• 1:20 for minor and exotic currency pairs, gold, and leading indices such as the FTSE 100, S&P 500, DJI 30, and NQ 100
• 1:10 for other commodities and small-cap indices
• 1:5 for shares, bonds, and exchange-traded funds
• 1:2 for cryptocurrencies

The higher the volatility of a given asset, the lower the maximum leverage retail traders can access.

In the United Kingdom, the Financial Conduct Authority (FCA) enforces leverage restrictions for retail traders similar to those introduced by ESMA. The FCA has taken a stricter stance on crypto derivatives, banning their sale to retail clients due to the high risks and lack of transparency associated with these products. For all other instruments, the leverage limits largely mirror those applied across the EU and EEA, providing UK retail traders with a broadly comparable level of protection against the risks of excessive leverage.

In March 2021, the Australian financial regulator ASIC strengthened its protections for retail customers by aligning the maximum leverage ratios for Australian retail traders with those imposed by EU regulators.

CFD Trading Order Types

Before selecting a regulated CFD broker, you should understand the order types available for derivatives and when each is appropriate to use. Each order type has distinctive characteristics and serves a specific purpose. The following section outlines six of the most common order types used when trading contracts for difference.

1. Market Orders are widely used by traders who seek to open a position immediately at the current market price. Slippage is possible if the broker’s execution is slow or during volatile market conditions.
2. Stop Orders instruct the broker to buy or sell at the prevailing market price once the asset reaches a specific value, known as the stop price. When triggered, the stop order converts into a market order and fills at the next available market price.
3. Limit Orders instruct the broker to buy or sell at a specified price or better. Buy limit orders execute at the specified limit price or lower; sell limit orders fill at the limit price or higher. Execution is not guaranteed with this order type.
4. Take Profit Orders help active traders lock in gains when the market moves in their favor. The order instructs the broker to close the position at a specified favorable price level.
5. Trailing Stop Orders are used for risk management and to help protect unrealized gains. They function like regular stop orders, but the stop price automatically follows favorable price movements – trailing upward for long positions and downward for short positions. The order executes only when the market reverses by a defined distance and hits the trailing stop level, which lets gains run while still capping adverse moves.
6. One Cancels the Other (OCO) orders link two conditional orders (typically a stop and a limit), instructing the broker to cancel one as soon as the other executes.

Best Platforms for CFD Trading

When trading derivatives such as CFDs, look for platforms with educational resources, reliable order execution, and tools for in-depth market analysis. The platforms profiled below are widely supported by CFD brokers.

MetaTrader 4 (MT4) provides a range of tools for customization and analysis. It supports automated trading, free technical indicators, customizable charts, hedging, and a single-thread strategy tester. It allows CFD traders to open long or short positions on thousands of markets supported by their broker.

MetaTrader 5 (MT5) is the successor to MT4. It offers faster order execution, additional features including netting, Depth of Market, and a multi-threaded strategy tester. Traders new to the platform may find MT4’s interface more approachable; MT5 is generally preferred for multi-asset trading.

The cTrader platform offers a copy trading feature that allows traders to mirror positions from selected strategy providers into their own account. Past performance does not guarantee future results, and losses – not only gains – are mirrored. CFD traders using cTrader can also access dynamic leverage that adjusts based on position size and risk exposure, though dynamic leverage tiers are not available at all brokers that offer cTrader.

ProRealTime provides access to more than a hundred technical indicators and a broad selection of timeframes. It supports order placement based on price movements and trend lines. The interface is designed for efficient, straightforward use.

TradingView, founded in 2011, is a charting platform and social network that serves over 100 million traders and investors worldwide. It offers a range of order types, hundreds of technical indicators, and customizable charts for in-depth market analysis. The platform operates on a tiered subscription model, with free and paid plans.

Costs Associated with CFD Trading

Trading CFDs can be relatively cost-efficient, with nominal commissions in many cases. Understanding the standard charges helps prevent surprises later on. The following section outlines the most common fees associated with CFD trading.

1. Commission charges typically apply only when opening leveraged contracts on stocks. They are percentage-based and calculated on the position’s full notional exposure, with many brokers charging approximately 0.10%. Opening and closing a position counts as two individual trades, so a commission applies to each side.
2. Spreads apply to currency pairs and commodity CFDs; the cost of a trade is embedded in the difference between the bid and ask prices at the moment a position is opened. The tighter the spread, the lower the transaction cost.
3. Overnight holding fees (swap fees) apply to leveraged positions held past the end of the trading day. The fee compensates the broker for effectively financing the position overnight. Depending on the instrument and the relevant interest-rate differential (for currency pairs) or financing benchmark (for other CFDs), the overnight adjustment may be positive or negative.
4. Market data fees are charged when subscribing to live price feeds on specific financial instruments from the broker. These fees are typically billed monthly.
5. Guaranteed stop-loss orders carry a premium, with the exact rate varying by broker and market. This order type helps protect a position against slippage and market gapping at the stop level. The premium is typically charged only if the guaranteed stop is triggered.
6. Payment fees apply at some CFD brokers when depositing or withdrawing funds. Brokers that process payments quickly and at no additional cost score higher in this area.
7. Currency conversion fees may also apply when trading CFDs. Brokers typically charge these fees when positions are opened in currencies other than the account’s base currency.
8. Dormancy fees apply to inactive accounts with no trading activity over an extended period, commonly twelve months. Brokers typically deduct nominal monthly charges from the available balance to cover account maintenance.

Investor Protections at CFD Brokers

Trading derivative instruments on margin involves substantial risk, particularly for those without sufficient experience or knowledge. Leverage acts as a double-edged sword, amplifying both gains and losses. To safeguard retail clients who trade derivatives, financial regulators worldwide require brokers to adopt the following protective measures.

1. Margin close-out rules help prevent traders from owing more than their account balance. If leveraged positions move sharply against the trader due to market announcements or elevated volatility, the broker automatically closes some or all open positions. Under ESMA’s rules, EU brokers are required to close out retail CFD positions when a client’s account equity falls to 50% or less of the initial margin required to open those positions.
2. Negative balance protection prevents retail clients from losing more than their deposited account balance when markets move abruptly against open positions. The measure reduces the risk of owing additional funds to the broker after a large adverse move.
3. Standardized risk disclaimers appear prominently on the website of any regulated CFD broker. Their purpose is to warn traders about the risks of leveraged trading and disclose the percentage of retail accounts that lose money trading CFDs with that broker.
4. Derivative experience questionnaires are designed to assess a client’s knowledge of CFD trading. They help brokerages determine whether a potential retail client is suitable for leveraged trading.
5. Leverage restrictions apply to retail accounts, capping the maximum leverage a client can use when opening positions. The specific limits vary with the volatility of the underlying asset. In the UK, the FCA has banned the sale of crypto-asset derivatives to retail clients.

CFD Broker Regulators

Derivative markets are regulated on a country-by-country basis. Each jurisdiction has a financial regulator responsible for overseeing licensed brokerages.

These agencies undertake a range of functions, including maintaining the integrity of the financial industry, supervising licensees’ prudential soundness, and monitoring for consumer harm to retail traders. The regulatory bodies that supervise the listed CFD brokers include:

• FCA – the Financial Conduct Authority of the UK
• ASIC – the Australian Securities and Investments Commission
• CySEC – the Cyprus Securities and Exchange Commission (CySEC licenses are valid across the EU and the EEA)
• FSCA – the Financial Sector Conduct Authority of South Africa
• FINMA – the Swiss Financial Market Supervisory Authority
• BaFin – the Federal Financial Supervisory Authority of Germany
• FMA – the Financial Markets Authority of New Zealand
• KNF – the Financial Supervision Commission of Poland
• MAS – the Monetary Authority of Singapore

Which Jurisdictions Prohibit CFD Trading?

Some financial regulators go beyond leverage restrictions and prohibit the trading of contracts for difference entirely. Residents of the jurisdictions below are not able to trade CFDs with the listed brokers, even if those brokers otherwise accept clients from that country.

USA – The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have barred local traders from setting up CFD accounts at domestic or offshore brokers under the Dodd-Frank Act. The regulators’ reasoning is that contracts for difference are over-the-counter (OTC) products. As such, they are far more difficult to oversee adequately because the transactions do not go through regulated exchanges.

India – Both offering and trading CFDs are illegal in India at the moment, although locals who set up accounts with brokerages based outside the country do not face prosecution for trading leveraged derivatives.

Belgium – Belgium enforced a blanket ban on binary options and leveraged CFD trading in August 2016, becoming the first country in Europe to do so. The ban came into force after a wave of complaints from local retail consumers.

Brazil – Brazil has a well-developed domestic trading market, but opening leveraged CFD accounts is not permitted for Brazilian retail investors. Notably, the prohibition does not extend to binary options, which carry comparable risks.

Written by E. Ifeanyi | Expert Editor Eugene Lee, CFA