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 CFD brokers available in Singapore to guide you to a trading platform that will suit your needs. If you still have questions, we put together an FAQ section at the end of this article to review some common concerns people have when they start trading.
Top Rated CFD Trading Platforms Singapore 2024
The best CFD brokers in Singapore are listed below:
- AvaTrade – Best CFD Trading Platform Singapore
- Pepperstone – Best Low Spread CFD Broker Singapore
- ActivTrades – Best Execution CFD Broker in Singapore
- CMC Markets – No Minimum Deposit CFD Broker in Singapore
- IG – Good CFD Broker in Singapore
- City Index – Best CFD Broker for Market Access in Singapore
- Trading 212 – Tight Spread CFD Broker in Singapore
When analyzing CFD brokers in Singapore, we looked at key aspects, such as regulation, customer service, commissions, safety, trading platforms, and spreads.
1. AvaTrade
AvaTrade is an online retail CFD broker based in Dublin, Ireland. The Central Bank of Ireland regulates them. Financial security and reliability are AvaTrade top priorities.
AvaTrade uses a proprietary CFD 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.
| Pros | Cons |
|---|---|
| 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 |
2. Pepperstone
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 and a host of other options.
74-89 % of retail investor accounts lose money when trading CFDs
| Pros | Cons |
|---|---|
| Low inactivity fees | Limited research tools |
| Free deposits and withdrawals | Commissions CFDs |
| Advanced risk protection and stop losses |
3. ActivTrades
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 banks 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.
| Pros | Cons |
|---|---|
| Inexpensive trading platform | Research tools don’t provide fundamental data |
| Excellent support for CFD traders | Limited product range |
| Great customer support |
4. CMC Markets
CMC Markets is a long-standing publicly-listed CFD Broker. The Financial Conduct Authority (FCA) regulates them. Because they are listed on a stock exchange, they must release financial statements to the public.
They are committed to customer service and care. Their help line is available 24/7, something most CFD Brokers in Singapore cannot compete with.
Additionally, their platform features lots of useful educational and research resources helpful to traders of all levels.
| Pros | Cons |
|---|---|
| Great selection of research tools | High charges on trading CFDs |
| Highly regulated globally | No social-trading |
| Great customer care |
5. IG
IG is regulated by many authorities worldwide including the FCA and Germany’s BaFin. Today, IG is one of the largest online brokers in the world.
IG uses a proprietary CFD 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.
| Pros | Cons |
|---|---|
| One of the best trading platforms on the market | High fees for CFDs on stocks and Forex |
| Long history of reliability | Account opening |
| Regularly discloses financial statements |
6. City Index
City Index is a subsidiary of GAIN Capital publicly listed on the NYSE. They are a global Forex and CFD broker that launched in 1983 and is regulated by high-level authorities worldwide.
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 many platform tutorials to make trading easier.
| Pros | Cons |
|---|---|
| Varied research tools | The desktop platform is a mess |
| Lots of educational resources | High minimum deposit |
| Easy account opening |
7. Trading 212
Trading 212 is a 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.
| Pros | Cons |
|---|---|
| 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, the best CFD brokers 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 becomes insolvent.
Singaporean tax laws surrounding CFDs 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 income streams. They may decide to tax you up to 22%, but it is at their discretion.
CFDs explained
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. 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 CFD Broker in Singapore
To pick a CFD broker in Singapore you should consider regulation, safety, trading fees and commissions, usability, market access, education and research, customer support and more. We list what to consider before choosing a CFD trading platform below.
- Regulation – Pick a broker regulated by at least one reputable authority. Singapore MAS (Monetary Authority of Singapore) is a top tier regulator. MAS has set guidelines for the maximum leverage amounts as well as rules regarding segregated client funds.
- Fees & Commissions – Brokers charge their users a proportional fee for every trade. Platforms charge a small commission fee for every position a trader takes. Other brokers make their money by charging a subscription fee. Most brokers charge inactive traders an inactivity fee if their account is not active for certain period.
- Education – Educational resources are invaluable for traders. For veteran traders, a lot of the information in these resources will be unnecessary. Newer traders should make sure that the platform covers the basics of CFDs. Markets are complex and volatile, especially those using CFDs. Make sure you’re properly prepared before committing money to trading CFDs, where losses can start compounding fast. The beauty of retail trading is that it’s open to everyone, bot only those with degrees in finance. But if you’re going to risk your money, you should choose a broker who gives you the tools to succeed.
- Research – Make sure that the broker has their own market analyses and research tools. These tools range anywhere from financial news feeds to charting software. Many CFD Trading Platforms in Singapore provide their own suite of tools.
- 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 change your trading experience . Trading platforms affect every aspect of trading. The assets you have access to, news, and graphing tools are all affected by your choice of platform.
- Customer Support – Look for brokers offering great customer support. Brokers should have email, phone, and live chat support. AvaTrade, is known for its stellar customer support. They have won awards for their service.
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.
FAQ
Are CFDs Legal in Singapore?
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.
Can you get rich trading CFDs?
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.
Is CFD gambling?
Depending on who you ask, CFDs could be seen as gambling. Many Islamic authorities across the globe consider it 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.
How Much Do You Need To Start CFD Trading?
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.
Which is the best CFD Broker for Beginners in Singapore?
We recommend AvaTrade for CFD Trading in Singapore. Every broker suits a different niche, and traders need to find the broker that best fits their needs. AvaTrade offers a wide variety of instruments and an option to invest in real stocks, beyond CFDs.
Conclusion
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.
