Best CFD Brokers UK for 2021

If you want to actively trade stocks to benefit from tight spreads, low commissions, leverage facilities, and short-selling capabilities – you might consider CFD trading. In this guide, we discuss the best CFD brokers for trading stock CFDs. Crucially, each broker meets a set of minimum requirements to ensure you are able to trade shares in a safe, convenient, and cost-effective manner.

List of the Best CFD Brokers in UK

We review the best CFD brokers in more detail further down this page, but if you’re just looking for a quick summary, here’s a list of the top CFD brokers of 2021.

1. eToro – Best All-Round CFD Broker with 0% Commission
2. Libertex – Established CFD Broker with Zero Spreads
3. Fineco Bank – Popular CFD Broker with Low Non-Trading Fees
4. Plus500 – Low-Cost CFD Broker with Tight Spreads
5. AvaTrade – Popular Online Trading Platform With Tight Spreads
6. Capital.com – Trusted CFD broker with Low Stock CFD fees

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What are Contracts-for-Differences (CFDs)?

Before going any further, it is important to quickly ascertain what we mean by ‘CFDs’ – not least because you will be trading more sophisticated financial products. In its most basic form, CFDs – or contracts-for-differences, track the real-world price of an asset.

Not only does this include stocks and shares, but virtually every investment class imaginable. Whether that’s gold, oil, natural gas, bonds, indices, or cryptocurrencies – if a market exists, as will a CFD instrument.

The ease in which a CFD can track the second-by-second price movement of a stock offers a plethora of benefits for an everyday trader. For example, you’ll often find that the best CFD brokers permit commission-free trading, as well as highly competitive spreads.

Furthermore – and perhaps most pertinently, stock CFDs can be traded with leverage, and you also short-sell the respective company. This means that you can speculate on the value of the shares going down – which would otherwise not be possible when using traditional stock brokers.

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Best CFD Brokers UK of 2021

Choosing the right CFD broker for your trading needs is fundamental. For example, are you looking to trade stocks from a particular exchange or market, or are you more concerned with low commissions and tight spreads? Similarly, you might be looking to deposit and withdraw funds with a specific payment method, or you might want access to an advanced trading platform like MetaTrader4.

Either way, these are some of the questions that you need to be asking of a CFD broker before signing up. To help you along the way, below we have listed the best CFD brokers currently serving UK CFD traders.

1. eToro – Best UK CFD Broker for Beginners

eToro actually covers both stock investment avenues – as it offers share dealing services and CFD instruments. Regarding the latter, you will have access to over 800 stock CFDs – all of which can be traded on a commission-free basis. This is, however, on the proviso that you do not keep your position open overnight, as this will incur financing fees, This is industry-standard nonetheless.

In terms of tradable markets, the stock CFD library at eToro covers the London Stock Exchange, as well as exchanges in the US, Germany, France, Japan, and many others. You can place both buy and sell positions on your stock CFD trade, as well as apply leverage. As per ESMA limits – this is capped at a ratio of 1:5.

The trading platform itself is native to eToro, and it has been built with the ‘newbie investor’ in mind. While this is ideal if you are just starting out, it likely won’t suffice if you’re a seasoned trader.

Outside of its stock library, you can also trade CFDs in the form of indices, cryptocurrencies, bonds, and commodities. An additional option for you to consider as a beginner is the platform’s Copy Trading feature. Upon selecting an experienced trader that you like the look of, you can mirror their trades like-for-like.

When it comes to safety, eToro is regulated in several jurisdictions and is licensed by the FCA, CySEC, and ASIC (Australian Securities and Investments Commission) – so you have regulatory oversight on three fronts.

Getting started with an account takes minutes – which you can do online or via the eToro app. Minimum deposits start at $50, which you can do with a debit/credit card, e-wallet, or bank account. Regardless of the payment method, all deposits come with a 0.5% conversion fee – as eToro is denominated in US dollars. Finally, eToro has a minimum withdrawal of $30 – the withdrawal fee is $5.

Pros:

Cons:

67% of retail investors lose money trading CFDs with this provider.

2. Libertex – Best CFD Broker for Trading via MT4

Launched in 1997, Libertex is a CFD broker that allows you to trade over 250 assets. This includes stocks, cryptocurrencies, forex, metals, indices, and ETFs. Libertex is one of the few CFD providers in the space that allows you to trade without paying anything on the spread.

Instead, you will pay a small trading commission – which is charged against the value of your order. The platform now boasts over 2.2 million customers worldwide, and it is regulated by CySEC. This particular regulator is a tier-one licensing body based in Cyprus, so you should have no issues regarding the safety of your funds.

In terms of leverage, this is capped at 1:30 for retail clients. When it comes to the trading arena, Libertex offers full support for MetaTrader 4 (MT4). This means that you can automate your CFD trades via an autonomous robot or EA (expert advisor). You will also have access to a vast range of technical indicators, and you customize your trading screen to mirror your personal requirements.

 

Pros:

Cons:

 83% of retail investor accounts lose money when trading CFDs with this provider. 

3. Fineco Bank – Top-rated UK CFD Trading Broker

Fineco Bank is one of these UK stock brokers that are a MUST to give a try if you’re a serious investor. This financial institution offers competitive fees to buy and sell shares – just £2.95 per trade.

Other fees include paying an annual fee of 0.25% on all stock investments. However, this is not a big deal as Fineco Bank remains at the top of the low-cost share platforms available in the market. Plus, the Italian financial institution offers you access to international markets, as well as automated portfolios.

 

As a UK investor, you should feel safe with the platform, as it’s heavily regulated by one of the most stricter financial watchdogs in the world: the Financial Conduct Authority (FCA). Yes, your funds are protected by the FSCS as well. You can get started by making a small investment of £100, allowing you to access a wide range of research tools, and a friendly-user platform to handle your account in an easier manner.

When you open an account before December 31st 2021, you’ll receive £500 in trading commissions to use within three months.

Fineco Bank fees:

Commission	£2.95 per UK stock trade (0.25% annual fee)
Deposit Fee	Free
Withdrawal fee	Free
Inactivity fees	Free

Pros:

Cons:

64.84% of retail investor accounts lose money due to CFD trading with this provider.

4. Plus500 – Commission-Free CFD Provider

Plus500 is exclusively a CFD provider, in contrast to other platforms which provide other traditional assets like eToro which you can read more in-depth in our eToro vs Plus500 review. This CFD broker hosts thousands of tradable instruments, on top of CFD indices, commodities, and cryptocurrencies – the platform hosts over 2,000 stock CFDs.

This covers heaps of UK and international exchanges – which is great if you are looking to gain exposure to less liquid markets. For example, while the bread and butter of the UK and US are covered, Plus500 also lists stock CFDs from Finland, South Africa, and Canada.

The CFD provider does not charge any trading commissions  – meaning your fees will come in the form of overnight financing (if holding positions beyond the close of trading hours) and of course – the spread. The trading platform itself is unique to Plus500, and there is no requirement to download any software. Instead, you can trade via the main desktop website or the Plus500 mobile application.

You can deposit and withdraw funds with a UK debit/credit card, bank account, or Paypal – and all payment methods are fee-free. Minimum deposits start at £100 – although you can place buy and sell orders for much less than this.

Leverage is available on all of the CFD products hosted by the platform – with stocks capped at 1:5 if you’re a retail client. Plus500UK Ltd is authorized & regulated by the FCA (#509909).

Pros:

Cons:

72% of retail investor accounts lose money when trading CFDs with this provider.

5. AvaTrade – Popular Online Trading Platform With Tight Spreads

AvaTrade is a good online broker for those of you that are looking to trade CFD assets via a day trading strategy. This is because the platform offers some of the tightest spreads in the industry. For example, most major forex pairs hosted at AvaTrade can be traded at a spread of less than 1 pip.

In addition to this super-competitive spread structure, AvaTrade allows you to buy and sell CFD instruments on a commission-free basis. In terms of tradable markets, AvaTrade offers thousands of financial assets. On top of forex, this includes bonds, stocks, indices, commodities, cryptocurrencies, options, and futures. As such, whatever market you’re looking for, chances are you’ll find it at AvaTrade.

What we also like about AvaTrade is that it offers several trading platforms. For example, you can use the AvaTrade platform via your web browser or through an Android/iOS mobile app. Furthermore, the platform also supports MT4 and MT5, which is great for advanced chart analysis and deploying automated robots, making it one of the best MT5 brokers UK if you wanted to explore this option.

We should also note that AvaTrade offers a spread betting facility. If you’re in the UK, this means that all profits are free of capital gains tax.

If you like the sound of AvaTrade but you want to test the platform out first, the CFD broker offers a demo account facility. You don’t need to deposit any funds to use this, which is great for getting to grips with the platform before taking the financial plunge. Minimum deposits at the platform stand at $100 – which you can via a debit/credit card or bank transfer. Finally, AvaTrade is heavily regulated and it holds licenses in several countries.

Pros:

Cons:

71% of retail investor accounts lose money when trading CFDs with this provider.

6. Capital.com – Top-rated and trusted CFD broker with Low Stock CFD fees

If you’re looking to trade CFDs and forex with a regulated and trusted broker, Capital.com is one of the best CFD brokers UK. Established in 2016, this global CFD trading platform is regulated and licensed by the United Kingdom’s Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC), and the National Bank of the Republic of Belarus (NBRB).

Fees and Commissions

When it comes to fees and commissions, Capital.com has low forex and CFD trading fees. Furthermore, UK traders have access to commission-free real stock trading. You’ll also benefit from market-leading non-trading fees, including no deposit, inactivity, or account fees. The minimum deposit is just $20, and there are five different base currencies to choose from. This means you’ll avoid a conversion fee. 

Tradable Assets and Research 

Capital.com has an abundance of CFD products ranging from 3,700 stock CFDs to 115 different ETF CFDs. Since CFDs are speculative, leveraged financial instruments it’s good to see that Capital.com offers fully interactive charts with a plethora of technical indicators, trading ideas, and fundamental data.

The Capital.com mobile trading app offers the same functionality as the desktop platform. Moreover, you can set up price alerts and push notifications to receive real-time quotes, ensuring you never miss a unique trading opportunity. 

Pros

Cons

76.72% of retail investor accounts lose money when trading spread bets and/or CFDs with this provider.

Compare CFD Brokers

CFD Brokers	Available CFD Assets	Pricing Structure	Fee for trading GBP/USD CFD	Fee for trading AMZN CFD – Buy AMZN Shares
eToro	Forex CFDs, stock Index CFDs, Stock CFDs, ETF CFDs, Commodity CFDs, Crypto CFDs	0% commission, low buy/sell spreads	2 pips	Invest in stock CFDs commission-free. Buy in bulk or just a fraction from just $50.
Libertex	Stock CFDs, Crypto CFDs, Forex CFDs, Commodity CFDs, Indices CFDs, ETF CFDs	CFD trading with zero spreads, and variable trading commissions	Zero spreads and 0.0% commission	-0.0003 % commission
Capital.com	Forex CFDs, Stock Index CFDs, Stock CFDs, ETF CFDs, Commodity CFDs, Crypto CFDs	0% commission. Fees are mainly based on competitive spread charges.	0% commission, spread: 0.00014	20.29 pips and 0% commission
Fineco Bank	Stock index CFDs, Stock CFDs, ETF CFDs, Commodity CFDs, Bond CFDs, Forex CFDs	Commission and spreads	As low as 1.0 pip	Fixed commission of $3.95 per trade for UK clients
Plus500	Forex CFDs, Stock index CFDs, stock CFDs, ETF CFDs, Commodity CFDs, crypto CFDs	Commission-free CFD trading. Most trading fees are built into the spreads.	Spread: 0.00013 or 0.01%	Spread: 23.94 pips or 0.75%
AvaTrade	Forex CFDs, stock index CFDs, stock CFDs, ETF CFDs, Commodity CFDs, Bond CFDs, Cryptos	0% commission. Market spreads	1.6 pips	Typical spread: 0.13%

How does CFD trading work?

Contracts for difference (CFDs) are a popular form of derivative trading. CFD trading allows you to speculate on the fluctuating prices of volatile financial markets, such as forex, commodities, indices, shares and more. 

When it comes to CFD trading, you don’t purchase or sell the underlying security (such as a commodity, actual share, or forex pair). Rather, you trade several units for a specific financial asset, depending on whether you believe the market price will rise or fall.

Most CFD brokers offer CFDs on a variety of global financial markets, including FX pairs, stocks, commodities, cryptos, and treasuries.

An example of one of the most popular stock indices is the S&P 500, which tracks the performance of the 500 large-cap companies that make up the US markets (NASDAQ and NYSE). 

What does this mean? 

For every point the price of the underlying asset moves in your favor, you receive multiples of the number of CFD units you opened long or short positions on. Therefore, for every point that price moves against your speculation, you’ll incur losses. 

What assets can you trade as CFDs?

When you open a live CFD trading account you’ll have access to a range of financial markets to trade CFDs on. Since this depends on your preferred CFD brokers you’ll need to research and check that the CFD assets you want to trade are supported. 

With a live trading account at eToro, you’ll have unfettered access to Forex CFDs, stock Index CFDs, Stock CFDs, ETF CFDs, Commodity CFDs, Crypto CFDs. When you trade CFDs with eToro, you can take a position on heaps of instruments. The typical spreads start from just 1 pip on the major currency pairs EUR/USD and USD/JPY.

Additionally, you can trade commodities like Copper from just 2 pips, the SPX500 from 0.75 points, stock and ETF CFDs from 0.09%, and cryptocurrency CFDs from just 0.75%. 

Benefits of Trading CFDs

Trading CFDs means you’re willing to exchange the difference in the price of a security from when you open the position to the moment it is closed. 

Boost your purchasing power with leverage

Since you only have to deposit a percentage of the trade’s total value to open a position, CFDs allow you to stretch the purchasing power of your investment funds. This initial deposit is commonly referred to as margin. Leverage is a double-edged sword in that it reduces the cost of opening a position, but it can also maximize any potential losses.

Why? This is due to CFD profits and losses being calculated on the overall size of your trade, not just the margin that you deposited. 

The amount of margin you’ll have to deposit depends on the size of the trade and the margin factor for your preferred financial market. For instance, share CFDs on Capital.com have a margin of 20%, while most forex CFDs have a margin of 3.3333%. 

Example: Using leverage to trade CFDs 

Let’s say you want to trade CFD shares on AMZN, which has a margin factor of 20% on Capital.com. This would mean that a position worth £2,000 would only need an initial margin of £400. 

CFD trading gives you the ability to go long or short

When you buy and sell CFDs you’ll come across the buy and sell prices. You’ll trade at the buy price if you forecast a rise in the market price of the underlying asset. This is otherwise referred to as going long. On the other hand, you’ll trade at the sell price if you believe the market price is going to drop – this is called going short. 

If your speculation proves to be accurate, you’ll make positive returns based on the total value of your position. But, if the markets move against your prediction, the loss will be calculated on the overall value of the position. In other words, potential losses could surpass your initial margin, so always invest money you can afford to lose. 

Access to a wide range of markets makes portfolio diversification easier

With eToro, you can trade share CFDs on 17 international exchanges including the LSE, NASDAQ, NYSE, Hong Kong Stock Exchange (HKG) just to name a few. Not to mention the other financial markets you can trade via CFDs such as forex, commodities, and indices. 

Moreover, as CFDs are leveraged derivatives you won’t take ownership of the underlying asset. 

CFD trading can be used to hedge your investment portfolio

Many expert investors use CFDs to hedge risks in their investment portfolios. In other words, hedging means you tactically open new CFD trades to safeguard any active trades from market volatility and to offset any possible losses. 

For instance, let’s imagine that you own Facebook shares but the market price has started to drop after the recent social media outages. While selling your FB shares is something you’re not willing to do, you’ll also want to mitigate the risk of the share price dropping to a level that’ll translate into a huge loss. 

Therefore, you open a short CFD position on Facebook (sell as opposed to buy) with the same trade value as your actual share investment. This way if the FB share price plummets, the profits on your short share CFD position will offset a percentage of the losses on your stock investment.

Limitations of Trading CFDs 

CFDs are highly leveraged instruments, meaning if positions head south you’ll be liable for the amount of borrowed leverage. Furthermore, highly volatile market conditions can make avoiding losses a challenge. The trick is to place Stop-Loss orders to help you minimize the risks involved with CFD trading. 

Leverage: a blessing or a curse? 

The number one high risk of trading CFDs is high leverage. But what about leverage stretching your buying power? CFD brokers calculate profits and losses based on the total value of the CFD position. This means that if the market price of the underlying asset starts to move against your prediction you’ll be facing losses based on the entire position, not just the initial deposit you put down as margin. 

Overtrading CFDs

Since CFD trading gives traders cheaper exposure to the markets, it’s easy to start overtrading. Overtrading is where your investment portfolio is overexposed to the underlying market. As such, the remaining capital is not enough to cover potential losses. Therefore, it’s important to only invest money you can afford to lose. 

Overnight Financing Fees 

With CFDs being highly leveraged, speculative financial instruments, it’s better suited to short-term investors when it comes to non-trading costs. Overnight financing fees come into play when you keep a leveraged position open after the market closes. All in all, it might be a smart move to consider alternative long-term investments such as bonds and ETFs, as well as ISA accounts. 

How to Find the Best CFD Brokers UK?

Irrespective of which UK CFD broker you go with, the end-to-end investment process works largely the same. In other words, you will always be required to open an account, upload some ID, deposit funds, and then place buy and sell orders on a DIY basis. With that in mind, your focus needs to be on key metrics like fees, commissions, payment methods, safety, and customer support.

Below we discuss these key factors in more detail to ensure you pick a CFD broker that is closely aligned with your needs.

FCA Regulation

You will be depositing and trading real-world funds – so it’s crucial that your money is safeguarded. This is why you should only consider a UK CFD broker if it is authorized and regulated by the Financial Conduct Authority (FCA).

In most cases (but always check first), this should also mean that your investments are protected by the Financial Services Conduct Authority (FSCS). For those unaware, this means that were the CFD broker to go bust, your funds would be protected up to the first £85,000.

This won’t, however, protect you from losses you have encountered from an unsuccessful trade. FCA regulation also ensures that the CFD broker keeps client funds in segregated bank accounts.

Deposits, Withdrawals, and Payments

You should also visit the CFD broker’s website to assess what payment methods it supports. This is crucial. as you will be depositing and withdrawing real-world pounds and pence.

Although the specific payment methods available to you will vary from provider-to-provider, this might include:

• Debit Cards
• Credit Cards
• Bank Account Transfer
• PayPal
• Skrill
• Neteller

Once you have assessed which payment method you wish to use, check to see whether or not any transaction fees apply. You should also explore how long the UK CFD broker typically takes to process withdrawals, and whether a minimum cash out threshold applies.

Fees, Commissions, and Spreads

You will need to pay a fee to trade CFDs online, so this should also form part of your in-depth research process.

In particular, look out for:

• Spread: The spread is the difference between the stock CFD’s ‘bid’ and ‘ask’ price. The best CFD brokers usually display this as a ‘buy’ and ‘sell’ price, respectively. Either way, you’ll want to ensure that your chosen platform offers competitive spreads, not least because this will contribute to your end-to-end trading costs. If you can get your stock CFD spreads below 1 pip, you’re doing well.
• Trading Commissions: Some, but not all, CFD brokers will charge you a trading commission. For example, IG charges 0.10% when trading UK stock CFDs – at a minimum of £10. In other cases, eToro and Plus500 charge no commissions at all.
• Overnight Finance: If you plan to trade stock CFDs with leverage, you might need to pay an overnight financing fee. As the name suggests, this will be the case if you keep the CFD position open overnight. CFD brokers base this on an annualized interest rate, which is broken down on a day-by-day basis. In most cases, you can view the specific charge before placing your trade.

Tradable Markets

The best CFD brokers will give you unfettered access to heaps of stock exchanges. While some of you might be happy to concentrate on UK companies, others like to take a more diversified approach. As such, look to see what markets the CFD broker offers. The likes of eToro, Plus500, and IG cover exchanges from the US, Canada, Germany, France, South Africa, Saudi Arabia, Finland, and more!

Features and Tools

On top of the fundamentals – we would also suggest exploring what trading features and tools the CFD broker offers.

This might include:

Technical Indicators:

If you want to make a success of your stock CFD trading endeavours, you’ll need to learn the ins and outs of how technical indicators work. This will ensure you have the capacity to read and interpret pricing trends. The best CFD brokers typically provide dozens of technical indicators – but be sure to check nonetheless.

Mobile Trading:

CFD trading is typically carried out on a short-term basis. That is to say, seasoned investors often keep a position open for a number of minutes or hours – so they need to be ‘at the ready’ when a new trend comes to fruition. As such, the best CFD brokers will offer a free stock trading app.

Educational Resources:

If you have little to no experience in trading CFDs, it’s best to stick with a broker that offers educational resources. This could be anything from a selection of how-to guides, video explainers, and even live webinars.

Leverage: 

If you have a slightly higher tolerance for risk, the best CFD brokers will usually offer leverage of up to 1:30. This is typically 1:5 when trading share CFDs.

Negative Balance Protection: 

Although now the norm with CFD brokers, it’s best to make sure that the provider has Negative Balance Protection in place. This means that an unsuccessful leveraged trade will not push your account balance into negative territory. Instead, when your CFD account balance hits zero your position closes automatically.

Getting Started With a UK CFD Broker Today  – Quickfire Walkthrough

Based in the UK and looking to start trading CFDs today? If so, below you will find a quick step-by-step walkthrough to help you start trading CFDs in no time. We’ve based our demonstration on popular CFD broker eToro – but feel free to use any platform of your choosing!

Step 1: Open Account and Upload ID

First and foremost, head over to the eToro website and elect to open an account. As is the case with all FCA-regulated CFD brokers, you will need to provide some personal information.

67% of retail investor accounts lose money when trading CFDs with this provider.

This includes:

• Full Name
• Home Address
• Date of Birth
• National Insurance Number
• Email Address
• Mobile Number

You will also need to upload some ID – as per UK anti-money laundering laws. This includes a passport or driver’s license and a recently issued utility bill or bank account statement.

Step 2: Deposit Funds

eToro accepts several UK payment methods. To deposit funds, you can choose from a debit/credit card, e-wallet, or bank account. Minimum deposits start at $50 and you will incur a small GBP-to-USD conversion of 0.5%. All deposits at eToro have instant processing times (apart from a bank transfer which takes 1-3 working days).

Step 3: Place a CFD Trade

Now that your account has been verified and funded, you can start trading CFDs straight away.

• Click on the ‘Trade Markets’ button
• Select your preferred CFD asset class (for example, stocks)
• Click on the asset you wish to trade

Next, you’ll need to set up an order. In our example, we are looking to trade Apple CFD stocks.

• Choose from a buy or sell order
• Enter your stake
• Choose from a market or limit order
• Determine if you want to apply leverage and at what ratio
• Enter your stop-loss price
• Enter your take-profit price
• Confirm the trade

67% of retail investor accounts lose money when trading CFDs with this provider.

Once your eToro executes your CFD trade, it will remain active until you close the position manually – or either your take-profit or stop-loss order comes into action.

 

Frequently Asked Questions on CFD Brokers

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