AuthorBy Jeffrey CammackAuthor InformationUpdated: June 25, 2020

We compare CFD brokers by factors that will affect the overall quality of the trading experience for the trader. To qualify to be on a list of the best CFD broker for 2021, each of these companies will have leading regulation, fair trading conditions, wide platform support and suitable educational material for beginner traders.  As there is no single best broker for everyone, our list includes brokers that excel in each of these categories. 

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Best CFD Trading Brokers 2021

Last updated on 25 Jun 2020
Updated 25 Jun 2020
by Editorial Director Jeffrey Cammackby Jeffrey Cammack
Jeffrey Cammack
All Brokers Regulated
All Brokers Regulated
by Trusted Authoritiesby Trusted Authorities
Trusted
1
AvaTrade
Min. Deposit
USD 100
4.184.18
Min. Spread
0.90 pips
Fx Pairs
50+
Deposit & Withdrawal Methods
Overall Rating
11110.54.18/ 5
AlertAccepts South African Clients. Average spread EUR/USD 0.90 pips on trading account with lowest minimum deposit. Max leverage 400:1. Islamic account available. MT4 & MT5 platforms supported. AvaTrade Group regulated by ASIC, FSCA, B.V.I FSC & FSA.
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With over 200,000 active traders around the globe, on both the MetaTrader 4 and AvaGo platforms, and the award for Best Trade Execution 2016 by the African Finance Expo, AvaTrade is a good partner for all types of trader. AvaTrade has built its reputation on being a client-focused, dependable broker, and continues to add to that reputation with the recent addition of AvaProtect to its product lineup.

With great trading conditions across Forex, commodities, cryptocurrencies, ETFs, bonds, and equities and boasting FSCA and ASIC regulation, AvaTrade is competitive with some of the best brokers in the world.

Pros
  • Good for beginners
  • Well regulated
  • Low minimum deposit
Cons
  • Dealing desk
  • Limited education
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2
FXTM
Min. Deposit
USD 10
4.234.23
Min. Spread
0.10 pips
Fx Pairs
59
Deposit & Withdrawal Methods
Overall Rating
11110.54.23/ 5
AlertAccepts South African Clients. Average spread EUR/USD 1.90 pips on trading account with lowest minimum deposit. Max leverage Flexible. Islamic account available. MT4 & MT5 platforms supported. Leverage offered can vary depending on country of residence, and your trading knowledge and experience. FXTM is regulated by CySEC, FCA, FSCA, and the FSC.
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FXTM is regulated by the FCA, CySEC and the FSCA in South Africa and the educational material offered is first-class. By keeping the focus on beginners looking for reasonable trading conditions, the FXTM team of educators and analysts have succeeded in creating a welcoming environment for new traders. Additionally, FXTM are one of the few brokers with 24/7 support, allowing new traders to get set up on weekends or holidays.

For the absolute beginner, FXTM has a great deal of training material to help new traders get started. Materials include articles, videos, webinars and a searchable glossary of new vocabulary. This is an excellent resource and many hours can be spent covering the basics of Forex Trading. There is an additional set of videos that cover analysis topics, and more detail on chart reading techniques.

FXTM has an open “Daily Market Analysis” section on their website where research analysts post bulletins that connect daily news items with analysis and actionable trading ideas. This can be combined with other sources to achieve a more comprehensive view of global events and the trading opportunities they represent.

The Standard Account has a minimum deposit of 100 USD and spreads start at 1.3 pips. FXTM also offers a Cent Account where the minimum deposit if only 10 USD but the spreads will be wider. If you can afford it, I would recommend starting with the Standard Account.

Pros
  • Good for beginners
  • Excellent education
  • Well regulated
  • Low minimum deposit
Cons
  • Expensive withdrawals
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3
CM Trading
Min. Deposit
USD 250
3.383.38
Min. Spread
1.50 pips
Fx Pairs
47
Deposit & Withdrawal Methods
Overall Rating
1110.503.38/ 5
AlertAccepts South African Clients. Average spread EUR/USD 1.5 pips on trading account with lowest minimum deposit. Max leverage 200:1. Islamic account available. MT4 & Sirix platforms supported. CM Trading is regulated by the FSCA.
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CM Trading is a well-regarded South African broker, regularly cited as the largest in the country, and headquartered in Sandton, Johannesburg.

CM Trading is a market-maker, but offers competitive spreads and is a good choice for new traders due to their great educational material and the CopyKat copy-trading system. Maximum leverage is 200:1 and both MetaTrader 4 and Sirix Webtrader platforms are available, allowing for some flexibility.

Customer service is generally excellent and, while deposit and withdrawal costs are high, many customers will find comfort in working with a good local broker.

Pros
  • Good for beginners
  • Great customer support
  • Copy trading accounts
Cons
  • Expensive withdrawals
  • Local regulation only
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4
XM
Min. Deposit
USD 5
4.384.38
Min. Spread
0.10 pips
Fx Pairs
57
Deposit & Withdrawal Methods
Overall Rating
11110.54.38/ 5
AlertAccepts South African Clients. Average spread EUR/USD 1.60 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & MT5 platforms supported. XM Group regulated by CySEC, ASIC, and the IFSC.
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XM Group has achieved substantial growth since 2009, earning 1.5 million clients living in 196 countries. Regulated by three major regulators and the recipient of many industry awards, XM Group stands out from a crowded field of market maker brokers for their customer service and educational support.

XM Group has extensive experience and in-depth knowledge of the global financial markets. XM’s operational philosophy is aimed at client satisfaction and low client turnover; they earn client loyalty through award-winning 24/5 personal customer service, varied account types and competitive trading conditions.

Pros
  • Well regulated
  • Excellent education
  • Wide range of assets
  • Fast and free withdrawals
Cons
  • Dealing desk
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5
HotForex
Min. Deposit
ZAR 70
4.294.29
Min. Spread
0 pips
Fx Pairs
51
Deposit & Withdrawal Methods
Overall Rating
11110.54.29/ 5
AlertAccepts South African Clients. Average spread EUR/USD 1.20 pips on trading account with lowest minimum deposit. Max leverage 1000:1. Islamic account available. MT4 & MT5 platforms supported. HF Markets Group regulated by the FSCA, FCA, FSC, CySEC and the DFSA.
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An STP broker regulated by multiple major authorities including the FCA and CySEC, HotForex has built a reputation among traders for its tight spreads, low fees, and fast market execution. Excellent educational and analytical material is available for both visitors and clients, and customer service is world-class.

Listed as one the Top 100 Companies by World Finance Magazine and with an award for Business Excellence 2015 (World Confederation of Businesses), HotForex is not just celebrated by their industry peers, but also by the financial industry as a whole.

Pros
  • Low minimum deposit
  • Tight spreads
  • Well regulated
  • Good range of accounts
Cons
  • Limited base currencies
Read More About HotForex
6
FxPro
Min. Deposit
USD 100
4.214.21
Min. Spread
0.60 pips
Fx Pairs
70+
Deposit & Withdrawal Methods
Overall Rating
11110.54.21/ 5
AlertAccepts South African Clients. Average spread EUR/USD 1.50 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5, cTrader and FxPro proprietary trading platform supported. FxPro Group is regulated by FCA, CySEC, FSCA, and the DFSA
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FxPro is one of the most respected Forex brokers in the industry. Regulated by the FCA and CySEC and with over 870,000 client accounts in 173 countries, FxPro is a truly global powerhouse.

FxPro offers a no dealing desk execution model on MT4, MT5, cTrader and a browser-based platform. A reasonable 100 USD opening deposit and outstanding customer service are combined with competitive spreads – often as low as 0.6 pips – to match profitability with security.

Pros
  • Well regulated
  • Great platform choice
  • Tight spreads
Cons
  • Limited education
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7
Plus500
Min. Deposit
ZAR 1500
3.693.69
Min. Spread
0 pips
Fx Pairs
70+
Deposit & Withdrawal Methods
Overall Rating
1110.503.69/ 5
AlertAccepts South African Clients. Plus500 does not publish their spreads, and thus a cost of trading can not be established. Max leverage 300:1. Islamic account available. Only Plus500 proprietary trading platform supported. Plus500 is regulated by FCA, CySEC, ASIC, and MAS.All information presented is verified as of the date of the review.Most retail CFD accounts lose money. Your capital is at risk.
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Founded in 2008, and with over 300,000 active customers, Plus500 is a leading CFD provider in the CFD trading industry mainly due to the simplicity of their trading platform, and the appealing trading conditions. Educational and analytical material are limited, the Plus500 trading platform very easy to use and reliability and security are absolute priorities.  Note that the Plus500 is not a suitable choice for beginners/inexperienced traders. 

Pros
  • Well regulated
  • Wide range of assets
Cons
  • Limited education
  • Limited account options
Read More About Plus500
8
FP Markets
Min. Deposit
USD 100
4.174.17
Min. Spread
0 pips
Fx Pairs
60+
Deposit & Withdrawal Methods
Overall Rating
11110.54.17/ 5
AlertAccepts South African Clients. Average spread EUR/USD 0.1 pips on trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4, MT5 & IRESS platforms supported. FP Markets is regulated by CySEC and ASIC.
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FP Markets is an ASIC-regulated, STP broker with simple account options and an exciting set of tools for traders with higher minimum deposits. Spreads are tight, even on the Standard Account, and the lack of dealing desk intervention for all accounts removes any concern over conflict of interest.

Trader education and market analysis are slightly weaker than other brokers, but the material presented is well-structured and useful. Overall, FP Markets is an excellent choice for beginner and more experienced traders alike.

Pros
  • Well regulated
  • Tight spreads
  • Good range of accounts
  • Great customer support
Cons
  • Expensive withdrawals
Read More About FP Markets
9
XTB
Min. Deposit
USD 5
4.294.29
Min. Spread
0.10 pips
Fx Pairs
49
Deposit & Withdrawal Methods
Overall Rating
11110.54.29/ 5
AlertAccepts South African Clients. Average spread EUR/USD 0.80 pips on the trading account with lowest minimum deposit. Max leverage 500:1. Islamic account available. MT4 & xStation platforms supported. XTB Group is regulated by CySEC, FCA and the IFSC
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Well-regulated, safe and award-winning, XTB is a leader in the Forex trading space. Joining other leading Forex brokers with reasonable trading conditions, excellent educational and analysis material XTB has developed an award-winning proprietary trading platform that goes beyond MT4 to offer clients easy-to-use functionality along with fast execution speeds.

Pros
  • Well regulated
  • Tight spreads
  • Low minimum deposit
  • Good for beginners
Cons
  • Limited platform choice
Read More About XTB

What is CFD Trading?

CFD trading, or a Contract for Difference, is where investors don’t take ownership of the asset they are trading. CFDs are derivative products; their value is derived from the underlying asset. The underlying asset can be anything that is commonly traded on a market – be this commodities such as crude oil, corn and gold or equities such as Spotify or Boeing shares or currencies such as Forex and crypto pairs, or even entire indices such as the NASDAQ, JSE or FTSE. So, rather than trading the asset itself, traders instead speculate on the future price of the asset with what is known as a futures contract.

Leverage

The second important thing to understand about CFDs is the leverage involved. CFDs are leveraged products where traders only put up a small percentage of the amount required for the trade, and a third-party liquidity provider will lend the trader the rest. The money in the trader’s account will then be used as collateral against the loss, but in exchange, the profits for the trader can be much larger. For instance, if you buy 100 USD of a crude oil CFD at 100 USD a barrel and the price of crude goes up by 2 USD you will make 2 USD in profit. But if you borrow 900 USD (to make an even 1000 USD when added to your 100 USD – a 10% margin or 10x leverage) and you buy 1000 USD of crude oil you would make 20 USD – all without spending more than your original 100 USD, a fairly incredible 20% profit in real terms.

Leverage Iceberg

The problem with this is that you can also lose money incredibly quickly. Take the same example above, but this time the price of crude oil falls by 5 USD. Because of your leveraged position (10x in this case), you would lose 50 USD, half of your original investment. In a volatile market (such as Crypto or certain commodities) it is very easy to lose your entire investment.

Additionally, losses apply not just to your investment but to your whole account and, if you are not careful, you can lose large amounts of the trading capital in your account through something called a margin call – this is explained in detail in the FAQs below.

Due to the risk involved in using leverage, retail CFDs are banned or very tightly regulated in much or the world. Since this trading is speculation on the price of an asset or instrument, traders can make money when the price is both rising or falling.  CFD traders will take long positions when the market is bullish, and short positions when the market is bearish.

How to trade CFDs

To start trading CFDs, you will need to find a reputable broker and open an account – check out our list above. Because it is a financial trading account, the broker will require that you submit copies of your government issues identification documents and proof of residence such as a utility bill issued in the past six months. Once your account is set up, you will be able to make a deposit and open your first trade.

Is CFD trading gambling?

It can be gambling if you treat it as such, but if you do your research and treat it like any other investment in the financial markets, it is not gambling. It’s important to remember the risk of leverage as your deposit is only a small part of your overall exposure and you can lose substantially more than your deposit if the trade goes against you.

However, it is possible to reduce your potential losses by using a stop order. This means that the trade will automatically be closed if it goes against you by an amount you specify. Higher spreads can be another pitfall as it can ruin any potential profits. So pick which instruments you trade very carefully.

What is short selling with CFDs?

Short selling is when you believe the price of an instrument is going to decrease rather than increase. Instead of buying low and selling high, you sell high and buy low – profiting on the decrease in the underlying instrument’s value. See our article on short-selling for a more detailed breakdown of how this can work and it’s uses in trading.

What is a Margin Call?

Brokers will apply a required margin on any position taken by a trader – this is often 50% of the original margin or 50% of your original investment, but it varies from broker to broker and instrument to instrument. If the total funds available in your trading account falls below this value the broker will make a margin call – requiring you to add funds to your trading account or close your position, covering any losses from your trading account. Needless to say, this is a very bad thing, and if you are planning on holding a long-term position in a volatile market you should have the required margin foremost in your mind when calculating the funds to hold in your trading account.

Commissions on Trades

In addition to your deposit to open or close a CFD trade, you might have to pay a small commission, which can be as low as 0.1%. That said, most brokers make money through the spread and will charge no commission. You may also have to calculate interest adjustments that are added or subtracted from your trade if you hold the trade overnight.

Is Trading Profits Taxed in South Africa?

Profits are taxable in South Africa as income, even the case if the broker is located outside of South Africa. The South African government never sees this as a tax-free form of income. For more detailed information read our tax article.

Is CFD Trading Allowed in Islam?

Traders can open Halal accounts, which the industry has named Swap Free accounts. Swap Free accounts will stop any interest payments being made either from the broker to you, or you to the broker.

Swap Free accounts are more common than you may think and are widely available with CFD brokers. The usual way to get a swap-free trading account is to complete the regular registration process and ask your account manager to make the changes in your account.

Summary

CFDs are designed to mirror the price of underlying assets so traders can take advantage of the price fluctuation without owning the underlying instrument. Technically a CFD is a financial contract between the trader and broker that allows speculation on price.

CFDs are a flexible and attractive alternative to other financial vehicles and they allow you to take advantage of the fluctuations in the value of a huge range of instruments.

Importantly, CFD trading allows traders to make money both when the market is rising or falling. Furthermore, you don’t have to put up the full cost of exposure to the market, and there is no fixed period for your trade. With CFDs, you’re able to trade a multiple of your capital using leverage, but this can be a double-edged sword so make sure you’ve done your research and that you keep a close eye on your trades.

Forex Risk Disclaimer

Trading Forex and CFDs is not suitable for all investors as it carries a high degree of risk to your capital: 75-90% of retail investors lose money trading these products. 

Forex and CFD transactions involve high risk due to the following factors: Over-leveraging, unpredictable market volatility, slippage arising from a lack of liquidity, inadequate trading knowledge or experience, and a lack of regulatory protection for clients.

Traders should not deposit any money that is not disposable. Regardless of how much research you have done, or how confident you are in your trade, there is always a substantial risk of loss. (Learn more from the FCA or from ASIC)

Our Methodology

Our State of the Market Report and Broker Directory are the result of extensive research on over 100 Forex brokers. The explicit goal of these resources is to help traders find the best Forex brokers – and steer them away from the worst ones – with the benefit of accurate and up-to-date information.

With over 150 data points on each broker and over 3000 hours of research and review writing, we believe we have succeeded in our goal. 

In a world where trading conditions and customer support can vary based on where you live, our broker reviews focus on the local trader and give you information about these brokers from your perspective.

All research has been conducted by our in-house team of researchers and writers, gathering information from various company representatives, websites and by sifting through the fine print. Learn more about how we rank brokers

References

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Trading Forex and CFDs is not suitable for all investors and comes with a high risk of losing money rapidly due to leverage. 75-90% of retail investors lose money trading these products. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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