Comparing the Main Global CFD Providers
There are 2 main CFD providers to choose from -:
|Parent Establishment Date||UK 2009 (FCA)||UK 2014 (FCA)|
|Regulated by products||FCA (UK)||FCA (UK) & ASIC (Australia)|
|Tradeable Markets||Global Indices, US and European equities, FX, Major Commodities, Interest Rates and Bonds, ETFs, Cryptos||UK, European & USA Shares, Indices, FX, Cryptos, Commodities and Bonds|
|Platform Type||Market Maker Only.||Market Maker Only.|
|Web or Download Application||HTML5 based web platform, own technology.||Web Platform / MT4 / Mobile|
|Margin requirement||Varies by Instrument, variable margin available||FTSE 100 shares : Retail 20% / Pro 5%
FTSE 250 shares : Retail 20% / Pro 5%
USA shares : Retail 20% / Pro 5%
European shares: Retail 20% / Pro 5%
|Commission rate (stocks)||FTSE 100 Shares: 0.1%
FTSE 250 Shares: 0.25%
US Shares: 0.1%
|European Shares : 0.10%|
|Commission rate (CFD Stock Indices (Cash))||FTSE 100: Daily Rolling 1 point, Future 3 points
Wall Street: Daily Rolling 2 points, Future 5 points
S&P Rolling Daily: 0.5
|FTSE 100: 0.8 point for cash, Wall Street: 1 point for cash, Nasdaq: 2 point for cash, Dax 30: 1 point cash, ASX200: 1 point cash, CAC 40: 0.8 point cash, EU Stocks 50: 1 point for cash, Japan 225: 4 point cash, S&P 500: 0.14 point for cash, Spain 35: 4 points cash, Hong Kong 50: 5 points cash, Switzerland: 3 points cash.|
|Financing cost||LIBOR +- 2.5%||LIBOR +- 2.5%|
|Charting Tools||Yes, basic and advanced charts|
|Supplementary Tools||CoreSpreads offer “Signals” which is 3rd party software for free on the platform as long as the account is funded.|
|Monthly Costs/Other Costs||No monthly cost||No|
|Client money held in segregated account||All client money segregated||Yes.|
|Minimum required to open standard account||No minimum required||No minimum for web platform, including the MT4|
|Supported base currencies||GBP, EUR, SEK, CHF||GBP/EUR/USD/AUD|
|Do you earn interest on free equity?||No.||No.|
|Client service support||In-house support.||In-house support.|
|Level of Customer Support||Good.||Very good including live chat support|
|Do you provide CFD specific education/training?||Yes, Webinars, Seminars and one to one coaching||Not currently but will soon be available.|
|Stop Loss Orders||Yes||Contingent/Trailing Stops and Non and Guaranteed stops but not OCOs|
|Do you offer GSO orders?||Yes||Yes|
|Do you offer limited risk accounts?||No||No|
|Do you offer discount on volume trades||Yes, possible on individual request||No|
|Disclaimer||72.5% of retail investor accounts lose money when trading CFDs with this provider.||73% of retail investor accounts lose money when trading these products with this provider.|
Note: You MUST apply through this site to guarantee any commission listed.
When trading contracts for difference it is important to choose the right CFD provider. Choosing a CFD provider should come down to a number of other considerations than dealing commissions and margins alone although you would be forgiven for believing these to be the most important prerequisites given the emphasis placed on headline-grabbing ultra-low spreads and margins.
Generally most people look for the best commission rates, reliable trading platform, and widest product range however there are many other aspects of a CFD provider which you should consider. Price is one factor that attracts traders but websites are also offering goodies to help pull in even more speculators. With CFDs (Contracts For Difference) gaining in popularity and in press coverage, here’s a useful guide to help you choose the CFD provider that is right for you.
There are different types of CFDs, depending on the CFD provider you are dealing with. These are not standardised products and each provider can have different brokerage rates, interest rates, dealing platforms, and so on.
CFD margin rates also differ from one provider to another so it is usually best to check out the respective provider’s website to see what their margin rates are. As a general rule, you can trade shares listed on the main indexes with most CFD brokers with only a 5-20% deposit requirement.
You need to examine the features provided and find the one that satisfy your needs. Of course, there is no stopping you from having an account with more than one CFD broker although then you would need to have funds in both accounts for trading. It will depend on the markets you want to trade, the size of your trading account, the frequency of your trading and the trading platform (DMA or Market Maker?) you want to use.
Top CFD Providers rated by Canstar Cannex
There are a number of CFD providers to choose from, meaning CFD traders have a range of choices, but choice can be confusing. In the comparison table above, we compare commissions at different sized trades, so that you can get a feel for how each provider charges. In addition, different CFD brokers have different strengths and weaknesses. CFD providers also have different features, different commission rates, different stock CFDs/markets – unfortunately, it is hard to find everything you’re after in one package and I’ve found that it pays to have accounts with different brokers. Sometimes on the surface a certain CFD provider might looks cheaper. I cannot be too explicit on this if you know what I mean. However, with the stiff competition in the market, CFD brokers are constantly upgrading their services and trading platforms.
Below I have listed the major points to consider before choosing a CFD broker -:
- Margin Percentages: This could range from anything between 1% and 75%.
- Commission charges: This could vary from 0% to a fixed amount.
- The Trading Platform: Make sure the platform is reliable and offers a good charting software.
- What markets do you intend to trade? Check out the CFD provider and the number of CFDs available to trade.
- How do you want to trade? If you intend to trade stocks you need to decide whether you want to trade CFDs through a Market Maker or Direct Market Access?
- Do you want to be able to guarantee your stop losses? If you do, then you need to find a provider that offers guaranteed stop loss orders as not offer this feature.
Choose your CFD provider like you would choose your stock broker. With many CFD providers vying for your business, you should do your homework and choose carefully who you deal with. Make sure that your CFD provider gives you access to domestic markets as well as other international markets that will provide maximum trading opportunities.
What makes a Good CFD provider?
Comparing CFD Brokers
What CFDs Can I Trade?
Comparing CFD Margins
Which CFD Trading Platform?
Comparing CFD Provider Spreads
DMA Trading or Market Maker CFDs
Financing Charges and Fees
Trading Platform Performance
Trading Charts and Research Resources
Risk Management Tools
A Regulated Broker and CFD Provider
DMA, Market Maker and Exchange Traded CFDs
CFD Trading Software
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A Peek into AvaTrade
TradeNext CFD Trading
Looking into ActivTrades
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Berkeley Futures Interview
ETX Capital Interview
Interview with the Powers at Hargreaves Lansdown
CMC Markets Interview
CMC’s Peter Cruddas
Lee Foster Bowman: Managing Director of iDealing
After my review of the different trading platforms it is easy to see that each trading platform has its strengths and weaknesses. If you invest in forex trading Deal Book 360 might be appropriate for you, if you like effortless web based software go for Pure Deal, if you only invest in ASX CFDs then web IRESS (although costly) could be an option.