Best CFD Brokers UK 2021

We’ve made a list of the best CFD brokers available to British clients living in the UK. We’ve also put together a list of resources to further explain what CFD trading is and how to do it. Make sure you understand how any trading platform works in depth before committing your money to it. As a trader living in the UK, you have access to some unique trading tools which aren’t available to the rest of the globe. One of these tools is trading Contracts for Difference (CFDs). We have a full list of best online brokers in the UK.

Best CFD Trading Platforms UK 2021

We looked at some of the highest regarded CFD brokers available to make this list. When comparing brokers, we’ll examine aspects such as the fees and commission on trades, customer service, ease of use, and other important factors.

This is our selection…

  • eToro
  • Plus500
  • AvaTrade
  • XTB
  • XM
  • Interactive Brokers
  • City Index
  • Pepperstone
  • Admiral Markets
  • CMC Markets
  • IG
  • FxPro

eToro

eToro is one of the most popular CFD brokers globally. They provide brokerage to millions of users and facilitate thousands of transactions every hour. Their customer service is widely regarded to be some of the best in the business.

eToro uses advanced risk management features like customizable stop losses and real-time alerts to mitigate the volatile nature of CFD trading.

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etoro logo
PROS
CONS
eToro has a large variety of trading instruments, including cryptocurrencies
The minimum deposit to open an account is high
The platform generates in-depth financial reports
Most CFD traders lose money on this platform
Has great copy-trading facilities

Plus500

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.

This platform works best for traders looking to only deal in CFDs, as they don’t offer other forms of trading.

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.

Plus500 Comparison
PROS
CONS
The platform is easy to use
Limited research tools
Customer service is quick and responsive
The platform only offers CFD trading
Opening an account is quick and easy

AvaTrade

AvaTrade is an online retail broker based in Dublin, regulated by the Central Bank of Ireland. AvaTrade is highly regarded in terms of financial security. 

MetaTrader 4 & 5 (MT4/MT5) are both supported by AvaTrade. They also have a proprietary trading platform, AvaOptions, which is focused on CFDs.

The login system uses single-step authentication, which has been known to be a soft-spot for cybersecurity.

Read Full Review

AvaTrade Logo
PROS
CONS
AvaOptions supports a wide range of markets
Demo account is limited to 21 days
Opening an account is quick and easy
High inactivity fees
Excellent research tools

XTB

XTB is a globally-based online CFD and Forex broker with offices in London and Warsaw. As such, they are regulated by the FCA.

XTB has a long track record of reliability and publishes its financial statements regularly. In 2021 Broker Chooser chose XTB as the Best CFD Broker available.

Their commission charges are some of the lowest available. They are also one of the few brokers who offer 0 minimum deposits to open accounts. This is useful for casual traders, but you will need funds to open a trade.

XTB logo
PROS
CONS
Low withdrawal fee
High inactivity fees
The platform was designed with CFD and Forex in mind
Commission for CFD on stocks is high
Excellent educational tools

XM

XM is a group of online retail brokers regulated by CySEC. They have won multiple awards for outstanding service, most recently the Best MT4/MT5 Broker from DayTrading.com.

XM is a social trading platform that allows users to copy the trading strategies of leading traders. Their platform has over 1 million users so there are a lot of options.

XM has a wide variety of educational material and research tools to help traders be profitable. There are useful webinars and lessons for all traders ranging from novice to seasoned veteran.

XM Logo
PROS
CONS
XM’s social platform allows for copy-trading
The various account types do not feel distinguished from one another
XM compiles and publishes research and market analysis
Customer support available Monday to Friday
Demo account

Interactive Brokers

Interactive Brokers is one of the oldest brokerage firms on this list. They started operating in the late 70s. Originally based in the UK under the FCA, they have expanded to offices across the globe.

Their platform is highly reliable and experiences next to no down-time.

Although there is no minimum deposit fee, they are not recommended for less-experienced traders.

The trading platform provides lots of information, but it isn’t all presented clearly. As it is, users are presented with too much information at once which could become overwhelming for some.

Interactive Brokers Logo
PROS
CONS
Loads of useful research tools
The various account types do not feel distinguished from one another
No minimum deposit
Customer support available Monday to Friday
Demo account

City Index

City Index is part of the GAIN Capital brand listed on the NYSE. They are regulated by the FCA as well as other highly-respected bodies globally.

On top of offering CFDs, they provide access to Forex and Crypto markets.

They are one of the most affordable brokers on this list. Their spreads and commissions are very low. Although they do charge inactivity fees, they are relatively low and only begin after a year of inactivity.

City Index Logo
PROS
CONS
No withdrawal fee
Platform does not give access to fundamental data
Easy to use platform
Limited trading tools
Plenty of tutorials on CFD trading

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 as well as a host of other options.

Pepperstone Logo
PROS
CONS
Low inactivity fees
Limited research tools
Free deposits and withdrawals
High commission on trading with CFDs
Advanced risk protection and stop losses

Admiral Markets

Admiral Markets is a Forex retail broker based in Estonia. They are regulated by the FCA as well as several other authoritative bodies.

AM offers over 4,000 assets so that traders can diversify their strategies. Their system supports MT4 and MT5 as well as WebTrader.

If you want to trade more than just CFDs, there are commission-free accounts available.

Admiral Markets Logo
PROS
CONS
Client funds are kept in segregated accounts
High minimum deposit to open accounts
Wide range of trading platforms
No fixed spread accounts
“Zero to Hero” 21-day training course

CMC Markets

CMC Markets is a long-standing publicly-listed forex broker. They are based in the UK and regulated by the FCA as well as other agencies.

CMC offers one of the widest ranges of tradable instruments at over 10,000 instruments. 

They are committed to customer service and care. Their help-line is available 24/7, something most brokers cannot compete with.

Additionally, their platform has a host of useful educational and research resources useful to traders of all levels.

CMC Markets Logo
PROS
CONS
Industry-leading research tool
High CFD commissions and spreads
Regulated worldwide
No social-trading features
Great customer care

IG

IG is another old name in the trading world. It 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. It generates concise reports for free for all traders.

IG Logo
PROS
CONS
One of the best trading platforms on the market
High fees for CFDs on stocks and Forex
A long history of reliability
Account opening is slow
IG regularly discloses financial statements

FxPro

FxPro is a No Deal Desk (NDD) broker regulated by many industry authorities globally. They have been operating since 2011 and have a positive track record of reliability.

They have options for Islamic-friendly accounts, although these exclude CFD options.

The FxPro platform facilitates copy-trading, which allows users to mimic the trading strategies of high-profit portfolios. Their platform is best for new and novice traders looking to start.

FxPro Logo
PROS
CONS
Opening an account is quick and easy
Customer service is known to be slow to respond
Platform allows for hedging and scalping strategies
Educational and resource tools are lacking

What is CFD Trading?

CFDs are contracts that are either bought or sold by traders that are linked to an underlying trade instrument, such as stocks, commodities, and Forex.

Traders do not own the underlying instrument. Instead, they use the CFDs to speculate on whether the instrument trends upwards or downwards over a specific period.

Regulation and specifics in the UK 

CFD trading in the UK is legal, but it is subject to a set of region-specific regulations. These regulations cover tax status on CFD earnings, as well as rules on leverage maximums.

Brokers in the UK are regulated by the Financial Conduct Authority (FCA). They are the determining body that sets limits on leverage and stop-losses. They also monitor and enforce adherence among brokers.

Leverage limits in the UK are set at 30:1 at a maximum.

The FCA has insisted that a traders position will automatically close if funds fall below half the initial margin amount. Losses are also not allowed to exceed more than the total funds in the trader’s CFD account.

New legislation in 2018 also enforced brokers to report on the total percentage of their CFD accounts that make losses. This reporting has led to some eye-opening numbers in that the majority of CFD accounts are not profitable.

Profits made on CFD trades are subject to capital gains tax. On the other end of the spectrum, losses incurred are tax-deductible.

Pros and cons of CFD Trading

CFDs are a complicated and volatile market. While it is possible to make large profits using CFDs, it’s more common that traders make losses. We’ve put together a brief list of the pros and cons of CFD trading.

If you’re looking for more information, skip to the end of this article where we’ve put together an FAQ as well as other important information on the subject.

Pros

  • Using leverage can lead to massive profits from a relatively small capital.
  • It’s possible to make money from both positive and negative performance of the underlying stock.
  • Commission on CFD tends to be lower than traditional trading vehicles.

Cons

  • Brokerages charge overnight fees for any contracts that run over a trading day.
  • Using leverage for CFD increases the potential loss traders may face.
  • Traders do not own the underlying instrument.

How to pick a CFD broker

Every broker is different. Depending on where the company is based, it will be subject to different regulations that affect the way you trade.

There are many other aspects, such as which platform brokers use to trade, that will affect whether or not they’re a good fit for you. We’ve gone over some of the most important factors to consider before committing to a broker.

Regulation

Brokers that are listed in more than one country will be subject to the regulations of all the areas in which they are listed.

Regulation can affect things like leverage maximums, although in the UK leverage is limited to 30:1.

Also consider whether the regulations that your broker adheres to keeps your funds in segregated accounts, which will protect you financially if your broker sees financial difficulty.

Fees & Commissions

Platforms such as City Index charge very little for the commission, but they take a proportional cut of each trade. Other platforms make their money by charging less in commission, but more in monthly subscriptions.

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.

Securities Available

Brokers will give access to different trading securities, often depending on the platform that they use.

CFD trading is done based on the performance of an underlying asset. For this reason, the more variety of securities a broker has available, the more diverse your trading strategy can be. As we know, diversity is key to turning a profit.

Brokers such as eToro have a wide range of securities. Brokers that only offer CFD options, like Plus500, tend to have a more limited selection.

Account Types

Retail brokers offer different accounts to their traders. With some brokers, higher tiers of accounts have access to more research tools or more competitive fees.

When picking a broker, try to find one that allows a demo account. Demo accounts let potential traders try out a platform before committing any real money.

Trading Platforms

Many retail brokers use third-party trading platforms to execute trades. The most popular of these platforms are MetaTrader 4 and 5 (MT4/MT5). 

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.

Some brokers have proprietary trading platforms. This means that they have set up their own platform that facilitates trading.

A broker that uses its own platform tends to have lower slippage. Smaller platforms tend to offer fewer securities options.

Customer Support

One of the largest concerns of many traders is that their broker has poor customer support. If a broker is in control of your money, you want to be sure that they are accountable to you. 

Because trading is done during a specific period, many brokers are only reachable during office hours.

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.

Leverage and Margin

Leverage and margin are controversial aspects of CFD and retail trading.

Because leverage maximums are set to 30:1 according to UK law, all of the brokers on this list keep to that limit.

Leverage of 30:1 means that you can increase your initial investment (your margin) by 30 times to secure a larger position. This is useful in that traders can earn profits from positions they would not have been able to otherwise secure.

A downside of leverage is that, while you can earn larger profits, you can also lose more than your initial investment.

Trading Tools

Trading tools are useful for traders looking to further understand a particular market. Depending on which broker you choose, and which platforms they have access to, traders will use different tools while trading.

These tools are on display on the brokers’ websites. It’s important to go through the tools they have on offer. Some of these tools will be useful to you, others may only be helpful to traders looking for other things.

One of the most useful, if often overlooked tools, is access to an economic calendar. Market fluctuations can seem random, but they are often linked to specific calendar dates. 

For example, if you bought CFDs based on the stocks of a Japanese company, it will be helpful to have access to the Japanese financial calendar.

Minimum Deposits

Many brokers will require traders to put up a minimum deposit amount to open an account.

Other than meeting the minimum deposit requirements, your account will also need to have the requisite funds to open your position. Some brokers offer 0 minimum deposit, which is useful for some just looking to start.

Opening an account with nothing in it will mean you cannot start trading.

FAQ

Is CFD Trading Legal In the UK?

CFD trading in the UK is legal. This is dependent on your broker adhering to the regulations set out by the FCA. The FCA sets out several guidelines that brokers must follow to legally trade in the UK. One of these provisions is that leverage maximums are set to 30:1. They argue that leverage higher than that is too risky for retail traders. Recently, the FCA prohibited CFD brokers from trading using cryptocurrency derivatives. This means that you cannot trade speculating the value of cryptocurrencies such as Bitcoin.

How to Open an Account?

The steps to open an account depend on the broker you’ve chosen. Before opening a real account, consider opening a demo account first.
Brokers will usually require you to set up an account on their platform by verifying your email and personal details.
After setting up an account, you will be required to link your bank card or other accepted forms of payment. Even brokers who do not have a deposit minimum will require this.
After receiving proof of your details and verifying your account details, you can start trading.

Do CFD Traders Pay Tax in the UK?

Traders who earn a profit on CFD trading will be required to pay Capital Gains Tax if their earnings exceed their annual CGT threshold. Traders do not have to pay Stamp Duty. If a trader loses money trading CFDs, they can write off their losses as tax-deductible.