Are you a seasoned trader or an aspiring investor looking for the best contract for differences (CFD) trading platforms and CFD brokers to elevate your investment game? In today's financial landscape, the options seem limitless, but finding the perfect platform tailored to your needs can be a daunting task.
Fear not, as we delve into an in-depth review of the eight most prominent CFD platforms available in the market today. As a CFD and investing enthusiast, I’ve tried numerous platforms over the years, gaining knowledge about each platform’s key characteristics, like the range of supported CFDs, trading fees, trading tools, interface accessibility, and more. With that knowledge, I hope I will be able to provide you with valuable insights into leading CFD platforms, including Interactive Brokers, eToro, CMC Markets, Plus500, and others.
Here are the best CFD trading platforms in 2023:
1. Interactive Brokers – The best CFD trading platform overall
2. eToro – The social trading pioneer
3. CMC Markets – One of the leaders in CFD Trading
4. Plus500 – A simplified trading experience
5. IQ Option – An innovative CFD broker
6. Trading212 – A user-friendly choice
7. AvaTrade – A forex-focused CFD platform
8. IG – The renowned trading platform
The 8 best CFD trading platforms: Examining the top CFD brokers for 2023
In the following sections, you’ll find the leading CFD platforms in the industry. The ranking of these platforms is subjective and doesn’t necessarily mean that one platform is better than the other.
1. Interactive Brokers – The best CFD trading platform overall
Interactive Brokers is a powerhouse in the CFD trading world, renowned for its extensive range of supported financial instruments. With a user-friendly trading platform, it caters to both novice and experienced traders. Interactive Brokers boasts highly competitive fees and spreads, making it an attractive choice for cost-conscious investors. Additionally, the platform stands out for its rigorous regulatory compliance, providing an added layer of security to your investments.
Key features:
- Wide range of CFDs: Interactive Brokers offers a wide range of CFDs to trade on, including stocks, indices, forex, and commodities.
- Competitive fees: The platform charges competitive fees for trading CFDs, including spreads, commissions, and overnight financing.
- Powerful trading tools: Access to advanced charting and technical analysis tools, which can help traders make informed trading decisions.
- User-friendly interface: Interactive Brokers' Trader Workstation platform is a bit complex for beginners, but it is highly customizable and offers a wide range of features for experienced traders. Interactive Brokers also offers a mobile app for CFD traders.
- Low margin requirements: Low margin requirements for CFD trading make it more accessible to traders with limited capital.
- Direct market access (DMA): DMA for CFD trading, which means that traders have direct access to the underlying market.
| Founded | 1978 |
|---|---|
| Types of CFDs | Stocks, Index, Metals, Forex |
| Trading Fees | Varies by instrument, starting at 0.05% (overnight financing charges start at benchmark +/-1.5%) |
| Leverage | Up to 30x |
| Minimum Deposit | $0 |
2. eToro – The social trading pioneer
eToro revolutionizes CFD trading with its unique social trading features. This platform is ideal for those who want to tap into the wisdom of successful investors. eToro offers a wide array of financial instruments, but it shines brightest in the realm of cryptocurrencies. Its user-friendly interface makes it accessible to traders of all levels, while its robust regulatory framework ensures your assets' safety.
Key features:
- Easy to use: eToro is a very user-friendly platform, making it a good choice for both beginner and experienced traders.
- Social trading features: A variety of social trading features, such as copy trading and Popular Investor, which allow traders to learn from and follow other traders.
- Fractional share trading: Traders can buy fractional shares, which can be helpful for traders who want to invest in expensive stocks with limited capital.
- Demo account: eToro offers a demo account so that traders can try out the platform and practice trading with virtual money before risking real money.
- Educational resources: A variety of educational resources, such as webinars, articles, and video tutorials, to help traders learn more about CFD trading.
- Competitive fees: eToro charges competitive fees for trading CFDs, including spreads, commissions, and overnight financing.
| Founded | 2007 |
|---|---|
| Types of CFDs | Stocks, indices, forex, commodities |
| Trading Fees | The spread for stock/ETF CFDs is 0.15% |
| Leverage | Up to 30x |
| Minimum Deposit | $50 |
Visit eToro
3. CMC Markets – One of the leaders in CFD Trading
CMC Markets has earned its reputation as a leader in CFD trading. This platform provides traders with comprehensive research and analysis tools, making it an excellent choice for those who rely on data-driven decisions. CMC Markets' expansive market access and competitive spreads and fees further enhance its appeal. With multiple regulatory approvals, it's a secure choice for traders.
Key features:
- Powerful trading tools: CMC Markets offers powerful trading tools, such as advanced charting and technical analysis tools, to help traders make informed trading decisions.
- Robust Research Tools: An array of research and analysis resources, helping traders make informed decisions.
- Negative balance protection: CMC Markets offers negative balance protection to CFD traders, meaning that traders cannot lose more money than they have in their account.
- Reliable customer support: Reliable customer support via email, phone, and live chat.
- Demo account: CMC offers a demo account so that traders can try out the platform and practice trading with virtual money before risking real money.
| Founded | 1989 |
|---|---|
| Types of CFDs | Stocks, indices, commodities, ETFs, treasuries, cryptocurrencies |
| Trading Fees | Commissions start from 0.10% |
| Leverage | Up to 30x |
| Minimum Deposit | $0 |
4. Plus500 – A simplified trading experience
Plus500 stands out for its straightforward and streamlined trading platform. It caters primarily to beginners, offering a user-friendly interface and a hassle-free trading experience. With competitive spreads and fees, it allows traders to keep their costs low. Plus500 boasts a strong regulatory framework and charges no commissions on trades.
Key features:
- User-friendly for beginners: Plus500's simplicity makes it an excellent choice for those new to CFD trading.
- No commission charges: Traders can trade without worrying about commission fees.
- High leverage: Thanks to up to 5x leverage on CFD trades, both profits and losses can be amplified.
- Fast execution: Plus500 offers fast execution of trades, which is important for CFD traders who need to be able to enter and exit trades quickly.
- Demo account: Traders can try out the platform and practice trading with virtual money before risking real money.
| Founded | 2008 |
|---|---|
| Types of CFDs | Stocks, indices, forex, commodities, ETFs, treasuries, options, cryptocurrencies |
| Trading Fees | No buy/sell charges, charges fee for FX conversion, inactivity, and overnight funding |
| Leverage | Up to 30x |
| Minimum Deposit | $100 |
5. IQ Option – An innovative CFD broker
IQ Option is known for its innovative approach to CFD trading, particularly in the realm of forex and crypto. The platform requires a low minimum deposit of just $10, making it accessible to a wide audience of potential CFD investors. Its user-friendly mobile app caters to traders on the go. IQ Option operates within a secure regulatory framework, ensuring the safety of your investments.
Key features:
- Variety of trading instruments: IQ Option offers a variety of trading instruments, including binary options and forex.
- Free demo account: Users can easily test out their trades and strategies in a secure environment without risking real money.
- Low minimum deposit: IQ Option has a low minimum deposit of just $10, making it accessible to traders with limited capital.
- Competitive fees: The platform charges competitive fees for trading CFDs, including spreads, commissions, and overnight financing.
| Founded | 2013 |
|---|---|
| Types of CFDs | Stocks, forex, cryptocurrencies |
| Trading Fees | Depending on the instrument, a 2% withdrawal fee |
| Leverage | Up to 30x |
| Minimum Deposit | $10 |
6. Trading212 – A user-friendly choice
Trading212 is an ideal choice for beginners, thanks to its user-friendly interface and commission-free trading. One standout feature is its support for fractional share trading, allowing investors to buy portions of expensive stocks. With top-tier regulatory approvals and an intuitive mobile app, Trading212 offers a well-rounded trading experience, particularly for users from the EU.
Key features:
- User funds insurance: Funds are kept in a segregated account, protected by the ICF up to €20,000
- Access to fractional shares: Trading212's support for fractional shares appeals to those looking to invest in high-priced stocks.
- Intuitive mobile app: The platform's mobile app is user-friendly and efficient.
- No commission on stock and ETF trading: Traders can trade stocks and ETFs without incurring commission charges.
- Educational resources: Trading212 offers a variety of educational resources, such as webinars, articles, and video tutorials, to help traders learn more about CFD trading.
| Founded | 2004 |
|---|---|
| Types of CFDs | Stocks, indices, commodities, forex |
| Trading Fees | Zero commission, a FX fee of 0.5% |
| Leverage | Up to 30x |
| Minimum Deposit | €10 |
7. AvaTrade – A forex-focused CFD platform
AvaTrade specializes in forex trading, making it a top choice for currency traders. The platform offers multiple trading platforms to suit varying preferences. With a strong regulatory framework, it ensures the safety of your funds. AvaTrade also provides ample educational resources for traders looking to enhance their skills.
Key features:
- Extensive forex offerings: AvaTrade offers an extensive selection of forex pairs for traders to explore.
- Wide range of trading tools: The platform provides traders with a wide range of tools and indicators for analysis.
- Excellent educational resources: Educational materials cater to both beginners and experienced traders.
- Competitive fees: Competitive fees for trading CFDs, including spreads and overnight financing.
- Reliable customer support: AvaTrade offers reliable customer support via email, phone, and live chat.
| Founded | 2006 |
|---|---|
| Types of CFDs | Forex, stocks, commodities, crypto, indices, options |
| Trading Fees | Overnight fee, inactivity fee ($50), administration fee ($100) |
| Leverage | Up to 30x |
| Minimum Deposit | $100 |
8. IG – The renowned trading platform
IG has earned its reputation as a renowned trading platform, offering a vast array of financial instruments. With competitive spreads and fees, it remains a favorite among traders. IG's long-standing presence in the industry instills confidence in its reliability. Regulatory compliance is robust, ensuring a secure trading environment.
Key features:
- Wide selection of tradable assets: IG provides access to an extensive selection of tradable assets, including stocks, forex, and commodities.
- User-friendly platform: The platform's interface is user-friendly, catering to traders of all levels.
- Comprehensive research tools: Traders can access comprehensive research tools for in-depth analysis.
- Wide range of CFDs: IG Group offers a wide range of CFDs to trade on, including stocks, indices, forex, commodities, bonds, options, and cryptocurrencies.
| Founded | 1974 |
|---|---|
| Types of CFDs | Forex, indices, stocks, commodities, cryptocurrencies, bonds, options |
| Trading Fees | Margin rate starts at 0.50% |
| Leverage | Up to 30x |
| Minimum Deposit | $0 |
What are the differences between CFDs, futures, and options?
CFDs, futures contracts, and options are all financial derivatives that allow investors and traders to speculate on the price movements of underlying assets without owning the assets themselves. However, they have distinct differences in terms of how they work and what they offer. Here are the key differences between CFDs, futures, and options:
Ownership:
- CFDs: With CFDs, you do not own the underlying asset. Instead, you enter into a contract with a broker to exchange the difference in the asset's price from the time you open the contract to the time you close it.
- Futures: Futures contracts also do not involve ownership of the underlying asset. They are standardized agreements to buy or sell an asset at a predetermined price and date in the future.
- Options: Options give you the right, but not the obligation, to buy (call option) or sell (put option) an underlying asset at a specified price (strike price) before or on a specific expiration date. You can choose whether to exercise the option.
Risk and Leverage:
- CFDs: CFDs often involve higher leverage, which means you can control a larger position with a smaller initial investment. However, this also increases the potential for both gains and losses.
- Futures: Futures contracts also offer leverage, but it is usually lower compared to CFDs. The leverage is determined by the margin requirements set by the exchange.
- Options: Options provide limited risk because you can only lose the premium you paid to buy the option. They do not have leverage in the same way as CFDs and futures.
Duration:
- CFDs: CFD positions can be held for as long as you want, provided you can meet margin requirements. They are typically used for short- to medium-term trading.
- Futures: Futures contracts have specific expiration dates, and you are required to settle the contract by either taking or making delivery of the underlying asset or offsetting the position before the expiration date.
- Options: Options also have expiration dates, after which they become worthless if not exercised. You can choose expiration dates that suit your trading strategy, from very short-term to long-term.
Flexibility:
- CFDs: CFDs are highly flexible and can be used for various trading strategies, including day trading, swing trading, and hedging.
- Futures: Futures are standardized contracts, which means less flexibility in terms of contract terms and customization compared to CFDs.
- Options: Options provide flexibility in terms of choosing strike prices and expiration dates, allowing for a wide range of trading strategies, including hedging and income generation.
Cost Structure:
- CFDs: Costs associated with CFDs typically include spreads (the difference between buy and sell prices) and overnight financing charges for positions held overnight.
- Futures: Futures involve commission fees, bid-ask spreads, and sometimes overnight financing costs.
- Options: Options involve the premium (the cost of buying the option), which is the most significant cost. There are no ongoing financing costs.
The bottom line: There are plenty of options available for CFD investors
The world of CFD trading offers an abundance of choices, and the right platform for you largely depends on your unique preferences and trading goals. Ensure that you conduct further research and consider your own needs before making a final decision.
Here’s a quick comparison of the top CFD platforms and their key features:
| Founded | Types of CFDs | Trading fees | Max. leverage | |
|---|---|---|---|---|
| Interactive Brokers | 1978 | Stocks, index, metals, forex | Varies by instrument, starting at 0.05% | 30x |
| eToro | 2007 | Stocks, indices, forex, commodities | Commission-free on stocks and ETFs, from 0.09% on forex | 30x |
| CMC Markets | 1989 | Stocks, indices, commodities, ETFs, treasuries, cryptocurrencies | Commissions start from 0.10% | 30x |
| Plus500 | 2008 | Stocks, indices, forex, commodities, ETFs, treasuries, options, cryptocurrencies | No buy/sell charges, charges fee for FX conversion, inactivity, and overnight funding | 30x |
| IQ Option | 2013 | Stocks, forex, cryptocurrencies | Depending on instrument, 2% withdrawal fee | 30x |
| Trading212 | 2004 | Stocks, indices, commodities, forex | Zero commission, a FX fee of 0.5% | 30x |
| AvaTrade | 2006 | Forex, stocks, commodities, crypto, indices, options | Overnight fee, inactivity fee ($50), administration fee ($100) | 30x |
| IG | 1974 | Forex, indices, stocks, commodities, cryptocurrencies, bonds, options | margin rate starts at 0.50% | 50x |
*Data collected on October 5, 2023
If you prefer trading physical financial instruments over derivatives like CFDs, you can consider investing in stocks. For more investment ideas, explore our selection of the best stocks to invest in in 2023, or invest in the top long-term dividend stocks if you prefer a steady income flow.
