CFD trading in Singapore has become so popular that it is now the fourth-largest global CFD market.
We looked at some of the most reputable brokers available to guide you to a broker that will suit your needs. If you still have questions, we put together an FAQ section at the end of this article where we go over some common concerns people have when they start trading.
Best CFD Brokers in Singapore 2021
When investigating brokers for Singapore, we looked at a few key aspects, such as regulation, customer service, and commissions and spreads. There are lots of other things to consider before committing to a broker, and we suggest you research brokers before you trust them with your money.
This is our selection of the best Brokers for CFD trading in Singapore…
- IQ Option
- CMC Markets
- City Index
- Activ Trades
- Trading 212
Plus500 started as an online retail broker in Israel in 2008. Since then it has grown globally and is regulated in 9 different regions. This makes it one of the most heavily regulated brokers on our list.
They currently support over 15 different base currencies for trader accounts and are constantly adding more.
Although the minimum deposit amount is relatively high, Plus500 excels in fees and commission charges. They charge highly competitive rates and don’t charge a withdrawal fee.
Easy to use
Limited research tools
Customer service is quick and responsive
Only offers CFD trading
Opening an account is quick and easy
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
IQ Option is an online retail broker based in Cyprus and regulated by CySEC. Their platform first went live in 2013 and since then has grown into one of the most highly regarded brokers in Europe.
IQ Option has easy to open accounts. The minimum deposit to start an account is low, so there’s very little barrier to entry. There is also the option to choose a VIP or demo account in addition to the standard account type.
Variety of underlying trade instruments for CFD
Customer service is known to be slow to respond
Easy-to-use mobile app
Traders outside the EU are given worryingly high leverage rates
Fast deposits and withdrawals into trading accounts
eToro is one of the most widely used retail brokers globally. They are set up similarly to many social media platforms, where users can select certain feeds that they want to view.
It is set up clearly and the dashboard is easy to use. Information is presented clearly and setting up trades is simple.
eToro has a copy trading feature where users can subscribe to signal providers and the platform will automate the trade with a similar proportion of your portfolio.
Large variety of CFD markets, including cryptocurrency
Users have reported that customer service can be unresponsive
Built-in copy trading
Higher fees than other trading platforms
Generates in-depth reports
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
AvaTrade is an online retail broker based in Dublin, Ireland. They are regulated by the Central Bank of Ireland. Financial security and reliability are AvaTrades top priority.
AvaTrade uses a proprietary trading platform, AvaOptions, which is focused on CFD trading. They also support both MT4 and MT5 platforms.
The platform uses single-step authentication, which is more vulnerable to cyberattacks.
AvaOptions supports a wide range of markets
The demo account is limited to 21 days
Opening an account is quick and easy
High fees for inactivity
Excellent research tools
PepperStone is based in Australia but is also regulated by the FCA. They are not listed on any stock exchange and are not required to release their financial statements.
They offer many different types of accounts to traders, including ECN and STP accounts. Islamic-friendly investing accounts are also available on request.
PepperStone offers trading with Forex, Crypto, and stocks. They support MT4 and MT5 platforms as well as a host of other options.
Low inactivity fees
Limited research tools
Free deposits and withdrawals
Advanced risk protection and stop losses
CMC Markets is a long-standing publicly-listed forex broker. They are based in the UK and regulated by the FCA. Because they are listed on a stock exchange, they are required to release financial statements to the public.
They are committed to customer service and care. Their help-line is available 24/7, something most brokers cannot compete with.
Additionally, their platform features lots of useful educational and research resources useful to traders of all levels.
Industry-leading research tools
High CFD commissions and spreads
Highly regulated globally
No social-trading features
Great customer care
IG is regulated by many authorities across the world including the FCA and Germany’s BaFin. Today, IG is one of the largest CFD brokers in the world.
IG uses a proprietary trading platform that’s in a class of its own. The platform UI is completely customizable and easy to use. The platform generates concise reports for free for all its users.
One of the best trading platforms on the market
High fees for CFDs on stocks and Forex
Long history of reliability
Regularly discloses financial statements
City Index is a subsidiary of GAIN Capital which is publicly listed on the NYSE. They are a global Forex and CFD broker that launched in 1983 and is regulated by high-level authorities all over the world.
City Index gives traders plenty of options to increase their skill and understanding of trading markets with their educational tools. They host frequent webinars and have lots of platform tutorials to make trading easier.
Varied research tools
The desktop platform is a mess
Lots of educational resources
High minimum deposit
Easy account opening
ActivTrades is a global CFD and Forex broker regulated by the UK’s FCA and other authorities.
They provide their traders with free deposits and withdrawals to trading accounts and accept payments from bank and credit cards. Unfortunately, they only accept four base currencies to open accounts, so users will have to pay a small conversion fee.
The platform provides some financial news updates, but the flow of information seems inconsistent.
Inexpensive trading platform
Research tools don’t provide fundamental data
Excellent support for CFD traders
Limited product range
Great customer support
Trading 212 is a Forex and CFD broker based in London, regulated by the FCA. Although they focus on CFD and currency trading, users do have access to some other markets.
Trading 212 caught a lot of negative press around the time the platform took to execute orders. Some traders claimed that trades took minutes and sometimes even hours to resolve. This could be the difference between sizable profit and substantial loss trading CFDs.
As of February 2021, Trading 212 suspended the ability to open new accounts on their platform. Until this policy changes, there’s no real way to recommend them to CFD traders.
Trading platform is simple to use
You can’t open a new account with them
No inactivity charges
Recent scandals are a cause for concern
CFD Trading in Singapore
Singapore is one of the largest CFD markets in the world and local regulation has had to be drafted to meet the demands.
Like all retail brokers, CFD brokers operating in Singapore must be registered with the Monetary Authority of Singapore.
As of 2019, the amount of leverage available to retail traders has been limited. Accredited investors have access to leverage rates as high as 50:1, but the MAS has restricted retail traders to leverage of 20:1.
Additionally, Singapore regulations stipulate that client funds are kept in segregated accounts. This ensures traders’ financial security if the broker should suddenly become insolvent.
Singaporean tax laws surrounding CFD trading are famously murky. Long-term investors are not required to pay tax on capital appreciation or dividends.
Taxes around day trading are done on a more case-by-case basis. The best advice is to speak with your local tax authority and be forthcoming about your trade volume and other streams of income. They may decide to tax you up to 22%, but it is at their discretion.
Originally, CFDs were used by hedge funds and asset managers on the London Stock Exchange. The popularity of online trading has brought access to CFD trading to casual traders.
Contracts for Difference are an agreement between a trader and their broker. Traders take out contracts that are connected to an underlying instrument, such as Forex, stocks, or commodities.
When traders open their position, they speculate that the underlying instrument will either gain or lose value during the contract period – also called “going long,” and “going short,” respectively.
One of the terms that frequently scares away newer traders is the concept of leverage and margin.
Leverage is the amount by which a broker is willing to increase a trader’s margin to secure their position.
Leverage is represented as a ratio, for example, 100:1. This means that the marginal investment can be increased to secure a position 100 times larger than its base value.
Local regulations determine the maximum ratios to which margin may be leveraged. Areas where regulation is strict, such as the EU limit leverage to 30:1 depending on the underlying instrument.
How to pick a broker
The regulations that each broker must adhere to change depending on where that broker is based. Brokers catering to Singapore must obey the laws set out by Singapore’s regulatory authority: MAS.
MAS has set guidelines for the maximum leverage amounts as well as rules regarding segregated client funds.
Many trading platforms provide lots of educational resources to their users.
If you’re a long-time trader, lots of this information will be superfluous for you. But if you’re just starting, you need to make sure that the platform you choose has some way of educating you about the basics.
Markets are complex and volatile, especially those using CFDs. Make sure you’re properly prepared before you start committing money to trading CFDs where losses can start compounding fast.
You don’t need a master’s degree to start trading, that’s the beauty of retail trading. But if you’re going to risk your money, you should choose a broker who gives you the tools to succeed.
Platforms like MetaTrader all provide their own market analyses and research tools. These tools range anywhere from financial news feeds to charting and graphing software.
Many brokers provide their own suite of tools to add to the vanilla experience offered on trading platforms. Some of these tools may be useful to you, others may be covered by better plugins already.
If you’re using the MetaTrader platform, have a look at the marketplace to see what the most popular scripts and plugins are that other traders use. This will give you some indication of what most people feel the platform is lacking.
Fees & Commissions
Brokers charge their users a proportional fee for every trade.
Platforms such as eToro charge very little for the commission, but they take a proportional cut of each trade. Others take less of a cut, but they charge monthly subscription fees.
You should also be aware of inactivity fees. Since most of these platforms make money from active traders, they penalize users who do not trade frequently.
Trading Platforms Available
The most common platforms for brokers to use to facilitate trading are the MetaTrader platforms MT4 & MT5. Some brokers have proprietary trading platforms to execute trades.
A broker that uses its own platform tends to have lower slippage and a higher degree of accuracy. Smaller platforms may have access to fewer security options.
The trading platform that your broker uses will determine which trading instruments you have access to. It will also affect the spreads and commissions you are charged for each trade.
If a broker is in control of your money, you want to be sure that they are accountable to you. One of the largest concerns of many traders is that their broker has poor customer support.
Many brokers are only reachable through telephone during office hours, Monday to Friday. Depending on where the broker’s offices are, and in which time-zone you reside, this can make communication difficult.
Platforms like AvaTrade have won industry awards regarding their superior customer support. Potential users should ensure that brokers are contactable through email, phone, and online chat.
How To Start CFD Trading
Depending on the broker you’ve chosen to start trading with, the steps taken to open an account and start trading may differ. For the most part, the process across brokers is the same.
We’ve put together a summary of the steps to take to start trading CFDs.
- Open an account: Go to your broker’s website and set up an account. You will need to enter personal details and may need to transfer funds to cover the minimum deposit to open an account.
- Install the trading platform: There are a variety of trading platforms available to CFD traders. Once you have chosen the platform that is right for you, download and install it. You can do this through the broker’s website onto your desktop or mobile.
- Choose your instrument: CFDs are all traded on the strength of an underlying instrument such as stock shares or currencies. Find an instrument where you feel you can pick out either a downward or upward trend.
- Open your trade: If you believe that an underlying instrument is going to trend down, you can “go short” and sell CFD contracts to brokers. Otherwise, buy CFD contracts: “going long.”
- Lather, rinse, repeat: You’re most likely going to not make much money, if any, on your first few CFD trades. Start with small amounts that you don’t mind losing. Once you hit on a winning strategy, try to refine it until you start turning a profit.
Other brokers to consider
Maybank Kim Eng: A platform that offers a wide range of tradable instruments on high commissions.
Phillip CFD: The first broker to introduce CFDs to Singapore. They offer over 5,000 different tradable assets to speculate on.
Oanda: An American Forex and CFD broker that offers competitive spreads on CFD trades. They utilize high-tech trading technology.
DBS Vickers: A broker subsidiary of DBS Bank. They offer access to a wide range of markets including real estate and stock options.
Interactive Brokers: One of the highest-performing brokerages in the world. They were one of the first firms to offer fractional share trading.
In short, yes. Provided the broker you are working with is in full accordance with the local laws, trading CFDs are perfectly legal. Be sure that you stay in line with the city’s tax regulations on your earnings.
It is possible to get rich on CFDs. Recent regulations in the EU have brought some worrying figures to light. According to a recent study by the Finance Magnates Intelligence Department, 70-80% of CFD traders lose money. Because using leverage is a common practice when trading CFDs, you could lose more than your initial investment. A more reliable way to grow your wealth is to invest your money in long-term stock options that tend to see a year-over-year gain.
Depending on who you ask, CFD trading could be seen as gambling. Many Islamic authorities across the globe consider CFD trading a form of gambling and it is not available in Sharia-friendly accounts.
Because you do not own the underlying instrument and are simply speculating its performance, many people argue that it is not a true form of retail trading. But traders argue that it is not entirely random. CFD performance is affected by the real-world trends that affect the underlying instrument.
The amount needed to open an account will depend on your broker. Some brokers do not have minimum deposit amounts to start trading, but you will still need some funds to take a position.
Many traders suggest starting with S$250 to take a position. It may seem like a little to start with, but remember you can always leverage your margin to increase the size of the lot you can take.
But beware, leveraging your position may lead to an increase in profits, but it could also cause massive losses.
There is never really one conclusive answer to this question, but we’ll try our best. Every broker suits a different niche, and traders need to find the broker that best fits their needs. For our money’s worth though, we think that AvaTrade is the best option for the majority of traders. Although they have a higher fee structure than most brokers, they also have one of the highest CFD success rates (around 30%). Opening an account with AvaTrade is easy and requires a relatively small deposit. AvaTrade has a great host of educational and research tools to explain complex systems to novice traders, as well as more advanced modules for experienced traders.
CFDs are a complex market instrument and are highly volatile. If you’re going to start trading CFDs, you must make sure you understand how they work and what the associated risks are. There are lots of brokers to choose from and they vary in all sorts of ways. With so much variety, there’s bound to be something out there that works for you. There are also plenty of applicable brokers that we weren’t able to touch on in this article that you should look at if you feel that none of the ones on this list is for you.