Top 11 CFD Brokers in the UK
What Is a CFD Broker?
CFD differs from stocks and stands for 'contracts for difference’.
It is a contract between broker and trader regarding paying the difference in price between the strike price and the price at the close.
It also gives the trader the ability to speculate the price of movement for stocks, commodities and forex.
The trade can last a few seconds, months or years. But is mostly used for short-term rewards.
The advantage of using a CFD broker is that:
- As you are not classed as a full-time trader, any money you make from a CFD trade is tax-exempt
- The short-term financial rewards allow you to make bigger long-term investments
- You have the potential to take a position in a market and gain profit regardless of a fall or rise in price
As trading involves your money, you need to make sure that you find a reputable broker that suits your specific needs.
Key Points to Consider When Choosing a CFD Broker
So, what should you look for when choosing a CFD broker?
Is the Broker Regulated?
This is the most fundamental piece of information you need. As a UK trader, you want your broker to be regulated by the Financial Conduct Authority (FCA).
Other EU based authorities will also be governed by similar organizations, but as Brexit's full effect is still to take place, it is advisable to find one that is FCA regulated.
Being listed on the stock exchange is also desirable. It suggests that the broker is fully transparent with their financial records. These financials should also be made available for public viewing.
What Are the Trading Fees?
This is the commission charged by the broker when opening your position in the market. However, with many brokers to choose from, services are competitive and financial incentives, such as no minimum deposit or no transfer fees, are common.
While researching, calculate the fees involved in relation to the amount of money you will realistically be trading with. Demo accounts which allow you to trade without using real money should help you with this.
How many and what assets does the broker hold? Are they strictly forex and CFD, or does its portfolio extend beyond that? Do you want a broker that excels in that area as well as providing you with long-term investment options?
The Trading Platform
The trading platform may only be a tool in the trading market, but it can make a huge difference.
It should have educational material, research tools, be easy to use and to look at – especially if you are trading on your mobile phone.
How Good Is the Customer Service?
This is especially important while you familiarise yourself with the platform.
Some brokers offer 24/7 help, while some are closed on weekends. Are there certain days when you are more likely to need to support? Do you prefer a call centre or live chat?
The Top 11 CFD Brokers in the UK
When it comes to your money, you want it to be in reliable hands. Having introduced important aspects for you to consider, here is a summary guide to the top CFD brokers in the UK:
Best for: Zero commission and all-round broker
eToro features include:
- Access to over 800 stocks
- No commission to pay (0% commission applies to stock and ETFs investment, spreads will be applied to CFD products)
- $200 minimum deposit (eToro operates in USD only)
- Regulated by the FCA, CySEC and ASIC
The trading platform is native to eToro and has been designed with new traders in mind.
*67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.*
Best for: Tight spreads and low fees
Pepperstone requires no minimum deposit and offers low trading fees.
It offers fantastic market analysis and trading ideas. While the educational tools are adequate, the news flow is basic. Customer service is available via phone, email and live chat, and all queries are answered promptly.
It is regulated by the FCA and ASIC.
Pepperstone uses MetaTrader 4, MetaTrader 5 and cTrader platforms. MetaTrader is considered one of the best CFD platforms.
It provides access to 14 major stock indices, more than 60 shared CFDs, five cryptocurrencies and 15 top commodities.
Minimum Deposit: $1
Regulations: FCA, FCS
Although its spreads are not as competitive as some others, Trading212 does work on zero commission, so it is well worth considering your potential profit margins with this broker.
Its proprietary platform comes with a custom-built mobile app designed specifically for on-the-go trading. With a clean user interface and several analytical tools and features, it is a valuable solution for those wanting a mobile trading experience.
Be aware, though, that if you are a more experienced trader looking for advanced functionality, you may find the simplicity of Trading212’s mobile app somewhat limiting.
Another benefit of Trading212’s service is that you can easily switch between active and demo accounts, allowing you to test out new styles and strategies risk-free.
Best for: Forex trading
Established in 1999 and owned by Jefferies Financial Group, FXCM is both safe and regulated.
To open an Active Trader account, you need a deposit of $25,000.
It has excellent education tools, good customer service, a regular news flow and useful search functions.
5. City Index
Best for: Spread betting
City Index is an award-winning broker that offers low forex and stock index CFD trading.
There is no minimum deposit for opening an account, but there are fees for non-activity on an account and as such, may not suit those looking to take long term positions.
Considered a leader in spread betting, it offers one point per share and competitive conditions for forex pairings.
It uses its own platform, as well as MetaTrader 4. There are excellent educational tools, including a demo account, and customer service is available via live chat and phone Monday to Friday.
City Index is listed on the stock exchange.
While the portfolio is limited, it is regulated by the UK's FCA and operates in over 8,000 markets.
Best for: Experienced traiders
With over 2,000 stocks, Plus500 is an easy-to-use platform with lots of educational material, a demo account and customer service 24/7.
There is a £100 minimum deposit but no fees for:
- Real-time quotes
- Dynamic charts and graphs
- Live share CFD prices
- Opening and closing of trades
- Rolling position
Plus500 uses its own platform that comes with a desktop download and an app.
Though Plus500 is very user-friendly, CFDs are 'complex financial products', thus the platform is not suitable for beginners/inexperienced traders.
It is regulated by the FCA and listed on the London Stock Exchange.
Availability subject to regulations
76.4% of retail CFD accounts lose money
Best for: International trading
XTB is a trusted all-around broker, established in 2002. It is regulated by the FCA and listed on the Warsaw Stock Exchange.
There is no minimum deposit for opening an account.
XTB uses its xStation 5 platform, which offers good customisation, search functions and modern design.
As a platform, it has all the standard educational resources and research tools.
It has over 2,000 stocks, though all cryptocurrency trading is paused on weekends.
Overall, the only negatives of XTB are that its fundamental data is limited, and there are high fees for some CFD trades.
8. CMC Markets
Best for: Research tools and advanced trading
CMC Markets has received awards for having the best trading conditions.
It has 9,400 global shares, and commissions start from 0.10% per share.
There is no minimum deposit, but the trader needs to have funds available to buy and share.
The education tools are excellent, and customer service is available at a reasonable speed through phone, email and live chat.
CMC Markets is listed on the stock exchange and has negative balance protection. While it does not hold a banking license, it is regulated by the top-tier FCA.
Unfortunately, while forex fees are low, stock CFD fees are high.
Best for: Experienced traders
IG is regulated by the FCA and BaFIN in Germany. It is listed on the London Stock Exchange and discloses its financials for transparency.
It began trading in 1974 and is one of the biggest CFD brokers in the world.
It boasts a world-class trading platform with exceptional educational material but does have high stock CFD fees.
Withdrawals and deposits are free.
You can choose to trade with IG's own platform or MetaTrader 4.
IG has over 10,000 stocks to trade with, and UK-based traders are not limited in what they can trade.
In terms of performance and reputation, IG is considered the best.
10. IC Markets
Best for: Those who value easy account opening and free deposits and withdrawals
IC Markets is an Australian-based CFD and forex broker. Its features include:
- Low forex fees
- £200 minimum deposit
- No inactivity fees
- Research and educational material
- Regulated by top-tier authorities worldwide but not the FCA
- Uses MetaTrader 5 for CFD stocks
The downside of IC Markets is that it has less than 1,000 stock options, the platform is poorly designed and there are high financing rates. It is not registered on the stock exchange, and its financial information is not available to the public.
This is a good broker, but better suited to forex traders.
Best for: Traders looking to venture into CFD trading
Markets.com was established in 2010 and is regulated by the FCA and ASIC.
Since beginning trading, reports say that 73.9% of retail accounts lose money when dealing with them.
However, Markets.com has over 2,000 stocks and excellent research tools at its disposal. Its customer service is quick and efficient, and the educational material is considered some of the best.
Overall, this is an average CFD broker. It has good resources, but high forex fees and financing rates.
As an experienced trader, you will know what you want from a broker, but for someone new to the industry, the choices available to you can be overwhelming.
Before deciding on a CFD broker, take advantage of any trials or demo accounts so you can get a full feel for the platform. The key points to remember are:
- It is regulated
- It is transparent with fees and offers good value
- It has an excellent trading platform