Best CFD Brokers for 2018
There are many good CFD brokers out there, some of which stand out even better. No matter how you choose to trade CFDs, there is a broker that can best facilitate this kind of trading. Some brokers are best suited for beginners, as they are easier to use. While others are more sophisticated and better for advanced traders. Most of the good CFD brokers are actually licensed and regulated in at least one jurisdiction. But more importantly, they have been well rated by real traders. And they also comply with basic legal requirements, so as to ensure that clients’ deposits are safe.
Many brokers are based in Cyprus, and are regulated there under the Cyprus Securities and Exchange Commission (CySEC), while some others are also regulated in more countries, such as the UK. There’s also a 3rd regulatory form in the EU, called MiFID, which strands for Markets in Financial Instruments Directive.
Generally, CFDs are available in most parts of the world, they are not available only in USA and few other countries. You will find good CFD brokers in Asian countries, Australia, and in Europe, where they have become very popular as well. CFDs were actually first introduced in the early 1990s, in the city of London, England, and were used by investment banks. Later they became mainstream, and we are now seeing CFDs being available to all kinds of small and retail size investors and traders. Some of these popular brokers are:
eToro offers CFD trading only, through a wide variety of assets and trading tools. 24option and IQoption offer both CFD and binary option trading.
eToro is designed for beginners to medium level traders. It was established in 2006 and it has been a leading CFD broker ever since. It is very easy to use, and very affordable too, since minimum deposit is just $50. It also offers very reliable social trading, possibly the best in the industry! eToro is in my opinion a very good CFD broker for beginners. It offers all the markets a beginner trader may want to trade, as well as good traders whose signals you can follow. Spreads are slightly higher than other brokers, and they also offer Islamic type accounts where no swap rates apply. eToro is regulated by the CySEC and is perfectly safe for traders to use. Advanced traders can also use eToro, and this is why some advanced traders become signal providers there, as they can earn additional income from their copied trades. eToro also offers Bitcoin and Ethereum trading, which is quite popular among many traders today. This is all CFD based trading, as opposed to trading the underlying cryptocurrencies themselves on an online exchange. Due to hack security concerns traders never deposit more than $500 to these online crypto currency exchanges. Whereas with eToro they feel safe to deposit much more than $500 and to do all their BTC and ETH trading through CFDs.
24Option and IQoption review
24option was established in 2010, and IQoption was established in 2013. They are both regulated by the CySEC and offer both binary and CFD trading. There are some differences however, as 24option requires $250 to open a live account and offers some trading signals. IQoption requires only $10 to open an account, and offers slightly better payouts on the binaries. IQoption have their own proprietary trading platform. All in all they are both good for serious CFD trading, and for selected synthetic trades where both CFDs and binaries can be used.
Long Established CFD Brokers
These are some of the earlier established, best rated brokers today. Together with eToro and GKFX they are the earliest established brokers in our list.
- AvaTrade established in 2006
- Markets.com established in 2008
- UFX established in 2007
- Plus500 established in 2008
AvaTrade is regulated both in the UK by the FCA and in Cyprus by the CySEC. It offers CFDs on many markets, ranging from forex, stock indices, bond, ETFs and commodities. It’s a very serious and professional broker, popular among professional traders. What’s unique with this broker is that it also offers the popular MetaTrader4 platform in a web based form, which makes it accessible from any device. Since the classic MetaTrader4 platform has to be installed on a device prior to being used. So this is definitely something that was missing in trading for quite some time.
Markets.com is regulated by the CySEC in Cyprus, and within the EU according to the MiFID directive. It offers spot forex, CFD forex, and many more assets to trade. It also offers swap free accounts, known as Islamic type accounts, which are also suitable not only for Islamic traders but for anyone who wants to trade free of the swaps, so as to avoid costs and confusion. Even though I don’t know the details of Islamic CFD accounts, I can assure you that there is real no catch, these accounts really are swap free, and the only possible tradeoff is usually a higher required margin. Swap free accounts are suitable both for Islamic traders, as well as for traders who trade long term, and are happy to trade under higher margins, in exchange for not incurring swap charges. As swap charges are an interest rate kind of charge, and they grow larger as time passes.
UFX is a CFD brokers that is regulated in Cyprus by the CySEC and within the EU, as required by the MiFID directive. This is a more professional broker, as minimum deposit is $500 and minimum trade size is larger than other brokers. But it offers many assets to trade, and some unique analysis tools and sentiment analysis tools. Some are similar to eToro’s tools, but UFX is more for the professional trader, the trader who is more of a market-specialist. UFX offers the MetaTrader4 platform and even Bitcoin trading.
More Recently Established CFD Brokers
The more recently established brokers are just as good and as proven as other brokers. They brought more competition to the marketplace, and their reputation has been proven through the volume of trade they handled so far.
GKFX was actually first established in 2008, but has been on the forefront of competition among CFD new and fast adapting brokers. It offers all you can expect from a good CFD broker, plus the MetaTrader4 platform, among many other tools. It also offers swap free accounts.
Trade.com was established in 2013 in Cyprus and it is regulated by the CySEC today. It offers a massive range of around 2000 assets, for CFD trading. It also offers educational and trading tools, so I can say this broker does meet the requirements of traders who implement complex correlation strategies.
CMStrader was established in 2013 and is regulated in several countries, and in the UK by the FCA. It offers both spot forex and CFD markets, as well as social trading. It also offers swap free accounts and many trading tools. Specifically it offers market analysis tools, free trading signals and even hedging is allowed. Above all, this broker is a real DMA (Direct Market Access) broker, offering superior liquidity. This is important only in big size CFD trading, and it is one area where it’s better than say eToro. But only when trade size is quite large, possibly in the range of $50 to $100 per pip. This is when you should use CMStrader rather than eToro. Because CMStrader is for large size professional trading, whereas eToro is more for beginners to medium level traders.
Summary about CFD brokers
All of these brokers can facilitate very good CFD trading going into 2018 and beyond. But due to complexity and liquidity and trading tools available, some brokers are better than others. All in all, one may need to use more than one CFD brokers to fully trade the markets as they really want to trade them. You can see that eToro offers all you want for social trading and for safe Bitcoin trading. Whereas other brokers may provide more DMA liquidity or different trading tools, or slightly lower spreads than eToro’s.
Even though I prefer CFD trading in the majority of cases, and definitely I prefer CFDs for cryptocurrency trading. I still like the spot forex market and some aspects of binary trading, but very specific aspects. I only like to use ECN forex brokers as a way to monitor their variable spreads and gauge market volatility. And very few cases of binary trades. In all other cases a pure CFD trade works very well for me, and I believe that’s what the bankers in the city of London, the early pioneers of CFDs saw back in the day. You can make a lot of money from CFDs, just as long as you know your market. Or if you follow some winning trader on eToro. Either way, CFDs are a very powerful and meaningful way to trade.