Contracts for difference (CFD) trading has become extremely popular. These are instruments through which the difference between the purchase price and the sale price of an underlying asset is exchanged, without the need to directly acquire the asset. Through CFDs, traders can trade various financial assets such as currencies, indices, stocks, etc.
There are many online brokers that offer these instruments. But who are the best CFD brokers in 2022? When choosing the best CFD brokers, the essential aspects that must be analyzed are reliability, regulation, cost, quality of products and services. This AtoZ Markets CFD broker review reveals the best CFD brokers you can trust in 2023.
What is a CFD broker?
A CFD broker is a financial services provider authorized to offer the possibility of trading through contracts for difference. The financial instrument is a contract between two parties (broker and trader) and is, therefore, an OTC (Over The Counter) asset.
CFDs are often created by the brokers themselves and usually offer various options such as CFDs on Forex, Commodities, Stocks, ETFs, Cryptocurrencies, etc. In some cases, these brokers offer other assets such as spread betting or difference bets (not available in Europe), vanilla options, and other trading instruments.
But what is the most important thing when choosing a CFDs broker?
Well, nothing less than the usual: personal circumstances. And these circumstances not only vary within each country but also between countries.
A US citizen who earns $100,000 a year is not the same as another who earns $15,000, let alone a citizen in Nigeria who earns $3,000 a year.
Neither is someone who wants to trade long-term and someone who wants to trade high-frequency the same.
We can be sure that depending on the circumstance we will find more suitable brokers than others.
The best brokers to trade CFDs
Well, to make things a little easier for you, we’ve included in this CFD broker list a selection of what are possibly the 7 best CFDs brokers of the moment.
There are many things to analyze when choosing these brokers, but I have tried to choose the most reliable, with the best services and products, and with the best reputation.
True, I'm sure I left many in the pipeline in this CFD broker review, especially some of your favorites, but we can't put more than 7 in the ranking.
In addition, the difference between the best is very small.
There are many other high-quality brokers that deserve to be on this CFD broker list. Maybe they will do it in the future if I see that they improve their product.
One important thing to note is that the vast majority of these brokers are also considered Forex brokers, if not all of them.
Out there you will see many people separating them, and it is true that there are some better than others in the different groups of assets, but basically, all of them carry out trading using this trading guide in CFD format.
That is why all those Forex brokers with offices in Europe have to abide by the ESMA CFD rules .
Well, from what has been said, the Forex products they offer are actually currency CFDs.
Want to trade with a regulated broker? Open a free account with AtoZ Markets approved CFD brokers:
Recommended CFD brokers
In this CFD broker list, we are going to see those 7 best brokers in the market, although not in particular in any order of preference.
The first in our CFD broker list is this Cypriot broker that started small but in a short time, it became the world reference for social trading of CFDs, a broker of which it is the undisputed leader in the world.
Today it has expanded and has offices in Cyprus, London, the United States and Australia.
As for the flexibility of the operation, it is even better than the two previous brokers, since we can invest in it from lots of 50 dollars, at least in stock CFDs.
For example, if Apple is at $150, we can trade it on eToro just by putting $50 in the margin. If we choose a leverage of 5:1 (the maximum in Europe), we will be trading a lot of 250 dollars valued at Apple, that is, approximately 1.7 shares.
Compare this to having to buy a minimum of 10 shares, which would be $1,500, and see the difference.
Therefore it is an exceptional option to operate for small investors.
Flexibility is maximum. So is the minimum deposit which is very affordable.
To this, we have to add that there are no commissions apart from the spread.
Let’s see the main costs of this broker:
- Apple Spread: 0.38
- Spread SP500: 0.75
- Gold spread: 0.45
- Long Swap Apple: 9% annual approximate
- Long Swap SP500: 5% (same)
- Long gold swap: 4% (equal)
The platform is a house brand and includes all the interactions of the social community.
The second in this CFD broker list is this old acquaintance of the European market, the Polish broker XTB, which is also listed on the stock market in that country and can boast of being one of the largest brokers in the world.
A broker with more than 2,000 instruments with which we will not be short of opportunities to operate in the most varied markets in the world.
In this case, we start with the slightly more demanding brokers in terms of deposit and operations. That is, those that are better for traders with greater purchasing power.
The main difference is found immediately in trading CFDs on shares.
In addition to the spread, which in this case will be small, we have to pay a minimum commission, which ranges from 0.08% of the nominal, or from $8. In other words, we will not be able to operate for less than $8 on the market side.
This means that we have $16 to pay when we buy and sell a title.
This makes it not a good option for trading small nominals.
- Spread Apple: 8 USD commission
- Spread SP500: 0.6
- Gold spread: 0.35
- Long Swap Apple: Approx. 8%
- Long Swap SP500: approx 5%
- Long gold swap: approx 5%
The platforms are called XStation itself and Metatrader 4.
Want to trade Forex with a regulated broker? Open a live account with AtoZ Markets approved forex brokers:
Who does not know this CFD broker through the sponsorship it has with Atlético de Madrid?
In addition, Plus500 has made the leap with IPO included, forming part of the FTSE 250 in London.
In terms of regulation, it is a broker similar to XM, with offices in London, Australia, Cyprus, and Singapore.
Little more can be asked of him in terms of regulations.
The advantage for those who operate under the umbrella of Australia (ASIC) or Singapore, for example, is that they can enjoy greater leverage, 20 in the first and 10 in the second for stock CFDs. But this is only available to international traders, not European ones.
In general, it has affordable conditions for small and medium traders, who will not have to pay a minimum. This is also aided by a minimum deposit of $100, which makes it perfectly achievable for all traders.
Let's look at the particular spreads (which vary constantly):
- Spread Apple: 0.3
- Spread SP500: 0.45
- Gold Spread: 0.37
- Long swap Apple: -11.4% (approximate annual)
- Long Swap SP500: -4.92% (same)
- Long gold swap: 4% (equal)
The platform is the proprietary technology so well known by the market. Although it is not as rich as the Metatrader, it is more than enough to trade in good conditions.
Naga is a broker of German origin that operates in the European market and part of the world market, so that most clients in Europe and Latin America can open an account with it.
The broker operates from different subsidiaries, although most trading services are provided from the one in Cyprus. However, the company is under the umbrella of European regulation.
This broker has two main features:
1 Offers a wide variety of trading and investment instruments
Not only do we have CFD trading on commodities, forex, shares, indices or cryptocurrencies, but it is also possible to buy shares in cash or trade real cryptocurrencies, one of the few brokers in the world to offer these features.
2 In addition to that it is a social trading broker. This means that copy trading can be done, although in this case only in the CFD market.
These two characteristics make it a key broker in the international market, since it is almost unique in these services since we do not know of any broker that provides CFDs, cash shares, real cryptocurrencies plus its private wallet, and also social trading.
In addition, being backed by a German company, it is made by a broker that seems quite serious.
If you want to trade with a regulated broker, open an account with any of the below brokers:
The European broker has continued to grow and has become one of those with the most important global offer. This can be seen in the different jurisdictions from which it operates, the main ones being the UK and Cyprus.
Like some other brokers such as eToro or XTB, Markets.com has taken advantage of the offer of cash shares, which can be contracted in one of its subsidiaries. Added to that we have a very large supply of CFD assets, with thousands of contracts to trade.
A particularly interesting thing about this broker is the great flexibility to trade stock markets since you can buy individual stocks from European markets without having to pay a minimum trading commission. The main fee to pay is the one included in the spread and that is a blessing for the trader, especially if he does not have a large capital and cannot buy large packages in the market.
XM started out quietly, but over time it has established itself as one of the best CFD brokers in the world.
It began with its headquarters in Cyprus, but over the years it has expanded throughout the world, competing for face-to-face with the greats of yesteryear, opening offices in the United Kingdom (its current headquarters), Australia or Belize.
With over 1,000 instruments it has more than enough variety for any trader.
That is, we have the classic indices, commodities, currencies, and at least the 1,000 most liquid stocks in the world.
The minimum size of operations in stock CFDs is usually around 10 stocks, which is acceptable for markets in Europe, with low prices, but more complicated for the US market, with quite high asset prices, in general.
Still, if we are a small trader we can trade these European markets without any problem.
Without a doubt, one of my favorites for smaller traders if what we want is to trade stock CFDs since it does not charge commissions for them and we can operate in an affordable way. Not to mention the minimum to open an account, which is almost 0.
Let's look at typical costs, commissions and spreads for very popular assets like Apple, the S&P500 and gold.
- Apple Spread: 0.15
- Spread SP500: 0.70
- Gold spread: 0.30
- Long swap Apple: -5.38%
- SP500 long swap: -5 approx.
- Gold long swap: – 4 approx.
The platforms are the classic ones: Metatrader 4 and 5.
If you want to trade with a regulated broker, open an account with any of the below brokers:
The Irish broker is one of the old veterans of the market. This broker is one of the most regulated in the world. No less than 6 world regulations this broker has, among which it has that of Japan and Australia, in addition to Ireland. Each of these regulations serves different regions. European customers will have to open an account with the Irish subsidiary.
In terms of markets, it offers the entire possible range of world markets, with a very interesting special offer of CFDs on vanilla currency options. In the markets, it stands out for being a broker with some of the lowest spreads and costs in the entire market.
It is also a broker with a good range of trading platforms, highlighting the proprietary one with which you can trade options and all markets, such as stocks, indices, etc. It also has Metatrader 4 and 5.
Another thing that AvaTrade stands out for is its customer service, one of the most extensive that we can find, with telephone numbers in different languages and several customer contact options.
CFD broker comparison
Well, we already have seen these seven brokers and their main features in this CFD broker comparison.
Of course, it has been an over-the-top CFD broker review and many other things remain to be reviewed more deeply, such as the quality of execution, the Forex or cryptocurrency markets offer, customer service, etc.
But more or less the quality of these brokers makes most of those things quite balanced.
Read More: Best CFD Brokers in Dubai 2023
As we have seen in this CFD broker list, many of these companies are listed on European stock exchanges, so we are talking about companies with the highest levels of regulation, not to mention that they all have offices and are supervised by the UK authorities, the Financial Conduct Authorities (FCA).
Likewise, most of these brokers are also registered in other regulations of the highest reliability, such as the Australian ASIC or the UK FCA.
One of the things in which these brokers do vary from one to another is the issue of commissions, which depending on the product may be better in one case or another.
However, remember that in this CFD broker comparison, we are only comparing three assets here and that this does not mean that in the other CFDs the differences are the same.
|Spread or commission in currency||Apple||S&P500||Gold|
Best brokers for stock CFDs
Of all the points of CFD broker comparison this is the most interesting, at least from my point of view.
This is so because the stock market is the richest and most dynamic of the world's financial markets and not all brokers offer it. More common is to offer CFDs on indices or commodities.
In all the brokers that we have seen we are going to have a significant and more than enough supply of shares. With the main 1,000 global stocks we will have plenty to be able to operate the markets efficiently and dynamically.
These spreads, however, are totally acceptable for a nominal price of the asset considered at $200 dollars (Apple's price when making this CFD broker comparison).
Read More: Best CFD Brokers in Australia 2023
The fact of charging a minimum commission means that a small investor who wants to buy only $1,000 from Apple has to pay a fairly high amount for a small account.
For example, in Plus500, $1,000 would be equivalent to buying 5 Apple CFDs, which with the spread would leave us with a commission of $1.5 on the first leg (the same would be on the sale).
Let's remember that this is for Apple, and that it could change for other markets in Europe.
Now, things change when swap costs come in.
At this point of our CFD broker review, we have already seen that the most expensive broker is Plus500 and possibly the cheapest is XTB.
CFD brokers eToro and XM are in the middle.
If what we want is to trade in the medium term, with many months maintaining our operations, or perhaps years, then we should see if the Plus500 option is worth it. The latter seems to me better placed for possible operations of weeks or a couple of months at most.
As you can see, the analysis becomes more complicated and here we are going to have to take a good look at what we want to do with our trading and what our financial situation is.
Best index CFD broker
As for the S&P 500 index, things seem fairly even, although in this case Plus500 wins, followed by CFD brokers AvaTrade and Markets.com.
If what you want is to do day trading, then brokers with lower spreads would be suitable.
Now, if you want to swing trade these differences are not that important.
Best commodity CFD broker
If what we want is to trade gold, our CFD broker list shows that XM, CMC and IG brokers are the ones with the lowest spread.
The most expensive in this case would be CFD brokers like eToro and Plus500.
As in the case of indices, these differences would be negligible if what we are looking for is swing trading.
For the other raw materials, it would be necessary to look at them one by one.
It is possible that if you want to trade oil you can even find other brokers with better costs. You can see more about it in the best CFD broker for oil.
CFD broker review - What is the cheapest CFD broker?
Difficult question, don't you think?
As we have seen throughout this CFD broker review, the one that is cheaper in stocks does not have to be cheaper in indices, and the same for raw materials or even cryptocurrencies, which we have not included in this CFD broker list.
Some CFD brokers will be better at holding longer-term positions while others will be better at trading more in the short term.
Other very important extra details must also be taken into account, such as the fact that eToro is a more expensive broker than its competitors in general, but because it is the best social trading broker on the market, which adds some extra services that your competitors do not offer. An option to consider without a doubt.
Read More: Best CFD Brokers in the UK 2023
CFD broker comparison conclusion: Which is the best CFD broker?
I hope that with this CFD broker comparison, I can help you choose the best CFD broker or at least the one that best suits your circumstances.
It is clear that if you want to open an account of $500 or $2,000, it is better to do it with the most flexible brokers, such as eToro, Plus500 or XM, especially if you are going to trade stock CFDs.
In the case of XTB, for example, if you wanted to open a stock CFD account, you would not do so with less than $5,000, in order to apply an adequate diversification strategy. Really, I never get tired of emphasizing how important this is.
Now, in CFDs, the most important thing is not so much the broker but knowing how to trade with them, which is the same as knowing how to trade in general.
That is more complicated and there is no guide that can teach you to be a competent trader. You only get that through years of experience and a lot of study.
Should you trade CFDs on your own at all?
Before you start trading CFDs, you'll want to read this.
Our in-house trading expert Dr Yury Safronau, PhD in Economic Sciences, gives you daily his best forex, metals, and cryptocurrencies to buy and sell signals right now.
His trading strategies which are based on non-linear dynamic models have achieved more than 65 000 pips of profits since 2015. And right now there are some very strong buy and sell signals across several markets you don't want to miss.
Want to see which ones?