CFD stands for contract for difference. It's a form of derivative trading. CFD's are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone so please ensure you fully understand the risks and seek independent advice. Our tables are suitable for experienced investors only

CFD trading allows you to speculate on the rising or falling prices of fast moving global financial markets.

What is CFD trading?

With CFDs you speculate on future market movements. You never actually own the underlying asset itself. Instead, you're exchanging the difference in the price of the asset. The difference starts from the point the contract is opened, to when it's closed.

You trade a contract for difference using leverage, meaning you can open a position with just a small percentage of the full value of the trade.

But it's high risk to trade in this way. You could lose more than your initial investment, meaning you'll end up actually owing money.

What markets can you trade CFDs on?

You can use this comparison to see the spreads and margin offered on:

  • Indices, stock exchanges like the FTSE 100 and Wall Street

  • Forex, currency pairs like GDP/USD (pound/US dolllar) and EUR/USD (euro/US dollar)

Most CFD brokers let you trade on many other markets, so check each one before opening an account.

How to find the best CFD trading account for your needs

Before you start CFD trading, find the best trading account from our selection of providers by considering:

  • CFD spread: Different providers offer different spreads on their trading accounts, which could affect the profitability of your trades.

  • Other charges: Some accounts charge other fees including commission, cash withdrawal fees and inactivity fees.

  • CFD trading platform: Consider looking for a CFD trading platform that has the features you want. Some providers let you try demo accounts that help you find a platform you are comfortable with.

  • Mobile apps: Some providers offer free trading apps that let you trade on the go.

The margin and size of the spread can vary widely between different accounts, so it is important to compare carefully.

Spread betting vs. CFD

Spread betting and CFD trading are both leverage based derivative products. But there are some key differences between spread betting and CFD such as:

  • Capital Gains Tax: In the UK, CFD trading is not tax free. But spread betting is.

  • Offsetting tax liabilities: With spread betting you cannot use losses to offset tax liabilities. With CFD trading you can.

  • Expiry: All spread bets have an expiry date. CFDs have no expiry dates, expect on binaries, futures and options.

CFD trading account FAQs

Q

How much money do I need to make a CFD trade?

A

It depends on the margin, as you can only make a trade if the amount in your account covers the margin needed for the trade.

Q

Can I lose more money than I deposit?

A

Yes, although your margin helps cover any losses you make, you could lose more that what is in your account.

Q

Do I pay tax on the profit?

A

You do not pay income tax on any profits, but you may have to pay Capital Gains Tax if you make a large profit.

About our CFD trading accounts comparison

Q

Who do we include in this comparison?

A

We include CFD trading accounts from our panel. They are either authorised and regulated by the Financial Conduct Authority (FCA), or a European regulator and listed on the FCA register as EEA authorised.

Here is more information about how our website works.

Q

How do we make money from our comparison?

A

We have commercial agreements with some of the companies in this comparison and get paid commission if we help you take out one of their products or services. Find out more here.

You do not pay any extra and the deal you get is not affected.

Q

How do we select our top CFD providers?

A

We display a range of providers that have completed due diligence and passed our compliance checks.