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CFD Companies |
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There a number of factors you should take into account when choosing from among the large number of CFD brokers and market markers.
It might be useful to first distinguish between two types of market players: Direct Market Access (DMA) brokers and market makers.
In the case of a direct market access broker, the price of the CFD will be the same as that of the underlying market instrument. The DMA broker makes his money by charging a commission.
In the case of a market maker, the price of the CFD will usually quite accurately reflect the actual market price, but there is no obligation on the market maker for this to be the case. They will often make their money through the ‘spread’, i.e. the difference between the buying and selling price of a CFD.
CFD Company Comparison
CFD Brokers - CFD Account Comparison
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| New Account - Minimum Deposit |
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| Maximum Leverage |
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| 24 Hour CFD Trading |
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CFD Comparison Notes
For a full comparison see CFDs Broker Comparison.
CFD Companies: DMA vs Market Maker
The first question you should therefore ask yourself is whether the company you are about to sign up with is a DMA broker or a market maker. Many CFD brokers offer both options.
CFD Companies: Variety of Trading Instruments
Find out whether the trading company offers only local instruments or international ones as well. Ask whether you can trade in shares, commodities, indices and currencies.
CFD Companies: Long and Short Trades
Most brokers like IG Markets and GFT will offer you the opportunity to execute both long and short trades, but not all of them do. If you want to use CFDs to hedge a physical share investment, you need to be able to execute short trades.
CFD Companies: Cost of Trading
Although an extra 0.1% commission might look insignificant, it can add up in the long run. Compare the commissions charged by DMA brokers with the spreads of a few market makers.
CFD Companies: Interest on Open positions
You will not pay overnight financing fees (interest) if you buy and sell a CFD on the same day, but you will often be charged interest on positions you leave open overnight. The rate varies from broker to broker. In the UK it is usually based on the London Interbank Offered Rate (LIBOR) – the rate at which banks borrow from each other.
CFD Companies: Margin Requirement
This is the ‘deposit’ you have to pay to execute a trade. With shares it is usually higher than with forex or commodities. The lower the margin, the less you have to put down before entering a trade.
With margin comes risk though. CFD trading is a leveraged investment option, it carries a high degree of risk to your capital and you can lose more than your initial deposit. As such CFD trading may not be appropriate for your investment needs.
CFD Companies: Guaranteed Stop Loss
This is one way to set a limit on how much you can lose on a trade. A guaranteed stop loss order protects you even if the market should gap, i.e. jump past a certain price.
CFD Companies:
For more details on specific CFD companies see below:
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City Index
City Index, a global leader in CFDs has been awarded Best Online CFD Provider at the MoneyAM Online Finance Awards. A City Index Account offers a wide range of markets and...read more: City Index
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ETX Capital
ETX Capital - ETX Capital offer 24 hour CFDs and spread trading. With an ETX Capital account there are advanced charts, one-click trading and thousands of markets from Shares, Indices and Forex to Commodities, ETFs, Sectors and...read more: ETX Capital
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Financial Spreads
Financial Spreads CFDs - commission free CFD trading on 2,500+ markets. Trade CFDs and spreads from one account, access professional level charts and...read more: Financial Spreads
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GFT
With GFT you can trade CFDs on a wide range of international markets. There are also tight spreads and 24 hour CFD trading. GFT offer more than 2,900 markets are...read more: GFT
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IG Markets
IG Markets offers thousands of markets on an award winning CFD platform. IG Markets is the UK's number one CFD broker and you can trade a wide range of UK and Global Shares, Indices, Forex, Commodities and...read more: IG Markets
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InterTrader
InterTrader - InterTrader offers both CFD trading and spread trading across thousands of global markets. An InterTrader account comes with MT4, 24 hour trading, zero-commissions and...read more: InterTrader
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Contracts for Difference (CFDs), margined forex and financial spread trading are leveraged products and may not be suitable for everyone. Losses can exceed your initial deposit. Please ensure that you fully understand the risks involved and seek independent financial advice where necessary.
CFD Companies, last edited by F. Lawson , 14-Dec-11.
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Warning: Contracts for Difference (CFDs), margined forex and financial spread trading are leveraged products and may not be suitable for everyone. Losses can exceed your initial deposit. Please ensure that you fully understand the risks involved and seek independent financial advice where necessary.
The contents of this website are for information purposes only and not intended as a recommendation to trade nor does the content constitute investment advice. All reasonable efforts have been made to present accurate information. Neither CFDs-Online.com nor any contributing company or individual accepts any responsibility for any use that may be made of the above or for the correctness or accuracy of the information provided.
* Tax law is subject to change. It can also differ if you pay tax in a jurisdiction other than the UK.
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