CFD Trading Fees
Anyone opening a contract for difference (CFD) trade is likely to encounter costs and charges as part of that transaction. These CFD fees can vary significantly depending on the market and broker in question, so it’s important that you understand how they function.
This guide explains the different types of CFD trading fees, as well as explaining how the charges work in a simple working example. Read on for a list of the key factors to look out for when choosing between the top brokers with the lowest CFD fees.
UK Brokers With Low CFD Fees
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You gain access to over 2,250 CFDs, available for trading 24/5 across popular markets such as forex, commodities, indices, stocks, and bonds. Utilizing deep liquidity and advanced bridge technology, IC Markets ensures optimal conditions for scalpers, hedgers, and algo traders alike.
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Pepperstone maintains its position as one of the fastest and most dependable CFD brokers during our latest round of testing. With execution speeds averaging around 30ms and an outstanding fill rate of 99.90%, the broker ensures a seamless trading experience without requotes or dealing desk interference. It also provides ample trading opportunities across over 1,300 assets.
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IG offers a huge selection of 17,000+ CFDs, providing more trading opportunities than most CFD brokers. Traders can go long or short on popular markets like stocks, currencies, commodities and cryptos, while custom price alerts and the IG Academy continue to enhance the trading experience.
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Over 8,000 CFDs are offered on a vast array of instruments, encompassing stocks, indices, forex, and commodities. Moreover, the TWS platform lends itself to seasoned traders, offering a comprehensive selection of over 100 order types and algorithms, alongside premium market data sourced from reputable sources such as Reuters and Dow Jones.
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FXCC offers a narrow range of CFDs beyond forex with a limited selection of metals, energies, indices and cryptos. However, it stands out with its high leverage up to 1:500, which will serve experienced traders looking to maximize their buying power while speculating on rising and falling prices.
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Plus500 presents commission-free CFDs encompassing a vast array of markets, spanning currencies, stocks, indices, and commodities. You can engage in long or short positions on popular assets, benefiting from adaptable leverage without encountering any concealed fees.
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BlackBull Markets CFDs are offered on forex, stocks, indices, commodities and cryptos with tight spreads and high leverage. The ECN accounts offer fast execution and low slippage, and the broker provides traders with plenty of extra tools and features plus 24/7 customer support.
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Trade 5,000+ CFDs from a single account with no hidden fees and free live market data. The suite of markets is impressive vs alternatives, including access to shares, indices, commodities and bonds.
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Trade all markets via CFDs, with retail leverage up to 1:30. With the RStocks Trader account, clients can access over 12,000 CFDs with algorithmic analysis tools and intuitive charts.
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CMC lets you trade CFDs on 12,000+ assets across currencies, indices, commodities, shares, ETFs and treasuries. Spreads are relatively tight, there are no hidden fees and the industry-leading MetaTrader 4 platform is also supported for leveraged trading. Year after year, CMC shines as one of the best CFD brokers in the market.
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Traders can speculate on 1000+ financial markets with high leverage up to 1:500. You can bet on rising and falling prices in currencies, commodities, indices, shares, and more without owning the underlying asset. With the comprehensive choice of CFD trading platforms, users can also switch between desktop, web and mobile for a seamless trading experience.
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XTB offers a huge selection of more than 2,100 CFDs spanning forex, indices, commodities, stocks, ETFs, and cryptos (location-dependant). Leverage up to 1:30 is available in the EU and UK, while global clients and pro traders can access up to 1:500. XTB stands out for its CFD trading resources and tutorials to assist traders in developing short-term trading strategies.
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IronFX’s asset list of 300+ instruments covers forex, stocks, commodities and index CFDs. Maximum leverage from 1:30 to 1:1000 is available depending on account location. Traders can access superb technical analysis features, including 30 pre-integrated indicators and 9 charting time frames.
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FP Markets' CFD trading covers a range of markets, including 10,000+ equities, indices, commodities, cryptocurrencies and ETFs. Spreads are tight and traders get fast execution speeds.
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AvaTrade's 1250+ leveraged CFD products span a wide range of asset classes including stocks, indices, commodities, bonds, crypto, and ETFs. You can speculate on underlying assets in the broker’s feature-rich web and mobile platforms with market-leading research tools to help discover opportunities.
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With the ability to take both long and short positions on 5,500+ CFDs across forex, stocks, indices, commodities, and cryptocurrencies, FOREX.com excels. Its exclusive Web Trader platform offers an excellent trading experience, equipped with over 80 technical indicators and average execution speeds of just 20 milliseconds, ensuring an optimal environment for serious traders.
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Trade CFDs on forex, stocks, indices, commodities and cryptos with high leverage up to 1:500 on the no-commission ClassiQ account. The raw spread account options have low commissions from $4 round-turn and offer lower maximum of leverage of 1:200 or 1:400, which is still competitive.
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Trade CFDs on forex, stocks, indices, commodities, ETFs, bonds and cryptocurrencies with variable leverage up to 1:30. The broker provides great value to traders with six free trades per day on US, UK and European stocks, tight spreads on forex and low commissions on ETFs.
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You can go long or short on a range of CFDs covering forex, commodities, shares, indices and cryptos. High leverage up to 1:500 is available for experienced traders in some locations, whilst beginners will appreciate access to micro-lots. There are no restrictions on short-term trading strategies using CFDs.
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Eightcap offers a wide range of trading options with 800+ CFDs across stocks, indices, bonds, commodities, and cryptocurrencies (depending on location), with leverage up to 1:30/1:500. It excels in its tools, notably the AI-enabled economic calendar covering 25+ countries with impact filters (high, medium, low). However, its commodities offering, particularly in softs like cotton and wheat, as well as the limited precious metal and energy assets, is its weakest area.
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ThinkMarkets continues to offer an excellent range of around 3500 CFD instruments covering forex, indices, stocks and commodities. Leverage is available up to 1:30 in the EU and UK, while global clients can access up to 1:500.
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Engage in leveraged CFD trading across a wide array of instruments, encompassing forex, stocks, commodities, and indices. Yet while the selection of asset classes is satisfactory, the charting software and floating spreads for short-term traders fall behind that of competitors.
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You can speculate on popular financial assets covering forex, commodities, indices, metals and bonds. You can get started with $0 minimum deposit, making the broker a good pick for beginners. There’s also over 130 technical indicators available collectively in the MT4 and OANDA Trade platforms.
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Traders can speculate on leveraged CFDs with zero commissions, spanning popular markets including currencies, equities and commodities. Additionally, the MetaTrader platforms collectively offer dozens of advanced technical indicators built for short-term strategies.
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Trade leveraged CFDs on over 1000 assets with low-cost spreads. You can also take advantage of the broker's integrated signals to help you determine when to enter and exit positions.
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AdroFx offers a most selection of around 100 CFDs on stocks, cryptos, indices and commodities. Its appeal lies in the high leverage up to 1:500 which you can't find in heavily regulated jurisdictions and the commission-free pricing model which will serve beginners. You can speculate on both rising and falling prices from the same product with CFDs.
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RoboForex offers a growing suite of over 12,000 CFDs, encompassing forex, stocks, indices, commodities, futures and ETFs. With an initial deposit of $10 and micro lot trading through to very high leverage up to 1:2000, RoboForex caters to a broad range of derivative traders. On the downside, analysis reveals execution speeds of 1-3 seconds, noticeably slower than IC Markets at 0.35 seconds, and suboptimal for fast-paced strategies like scalping.
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PrimeXBT offers CFDs across four asset classes with very high leverage up to 1:1000. Beginners can also take advantage of the broker’s useful technical analysis guides and CFD education, plus 24/7 in-platform support via live chat.
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You can trade CFDs on over 3,000 assets and access rich market data through the integrated TradingView charts. There are also comprehensive free learning tools available for beginners via the eToro Academy, including dedicated CFD trading courses and guides.
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Markets.com offers a strong variety of CFD products, not only covering popular asset classes but also more interesting markets such as IPOs and Bonds. The low fees and educational resources will appeal to beginners, whilst seasoned CFD traders will appreciate the feature-rich charting platforms.
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Trade CFDs on 100+ instruments from popular asset classes. Leverage up to 1:200 is available on precious metals, while stocks, indices and energies can access 1:20 max leverage and 1:10 for commodities. On the negative side, the depth of assets is limited vs other CFD brokers.
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Errante customers can trade stocks, indices, commodities and cryptocurrencies with leveraged CFDs. The level of leverage available depends on regulatory oversight, with 1:30 the maximum allowed in the EU though this varies by asset.
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VT Markets offers over 1000+ CFDs spanning currencies, stocks, indices, ETFs and commodities. The MetaTrader charting platforms provide dozens of technical tools alongside integrated market analysis resources and zero restrictions on short-term trading strategies.
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You can trade a competitive range of CFDs encompassing crypto, indices, energies and metals, with very high leverage up to 1:1000. ECN pricing is available, with spreads from 0.0 pips and low commissions from $2.50. A Cent account is also available for those on a smaller budget.
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With CFDs on 20+ Polish and 30+ US stocks, as well as energies and seven global stock indices covering US, UK, European, Australian and Japanese markets, Just2Trade offers a superb selection of global assets.
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Dukascopy offers highly leveraged CFDs with rates up to 1:200. A wide selection of asset classes are available, including currencies, equities, commodities, ETFs and cryptos. Spreads are also tight starting from 0.1 pips and traders get 24/7 support.
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FXTM’s CFD offering spans 250+ forex, stocks, commodities and indices, plus crypto CFDs at the global entity. Leverage up to 1:30 is available from the CySEC-regulated branch, though highly seasoned traders can also access massive 1:2000 rates from the global entity.
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You can trade CFDs across a range of diverse markets with flexible account types and leverage up to 1:1000. With access to both MT4 and MT5, traders can execute multiple short-term CFD trading strategies using the dozens of pre-integrated technical indicators and graphical objects.
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OspreyFX offers leveraged CFDs on forex, commodities, stocks, cryptos and indices. Deep liquidity is available from 50+ providers with a competitive ECN account that will suit active trading strategies, including scalping.
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Libertex's list of CFDs covers a decent range of tradeable underlying assets, but there isn't much depth with only around 250 in total. Leverage up to 1:30 for retail clients is available in accordance with CySEC regulations, and traders can choose between three excellent trading platforms. Best of all are the tight spreads available on all markets and the zero commissions on investments in stocks.
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The broker offers a small range of 100+ CFD instruments spanning key markets, with high leverage up to 1:500. Pricing is reasonable, with round turn commissions coming in at $6 alongside tight spreads. Multiple short-term strategies are also permitted, including hedging and scalping.
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Trade 400+ CFDs on forex, stocks, commodities, indices and cryptocurrencies with the choice of commission-free or raw-spread accounts with transparent fees. Speculate on rising and falling prices with no hidden charges.
CFD Trading Fees Explained
CFD fees consist of costs or commission charges associated with trading contracts. These costs can vary significantly, but they all pose a risk to your hard-earned profits.
Some of the most popular trading brokers, such as Pepperstone, Oanda, IG, eToro, XTB, and Degiro, all charge CFD fees to their UK investors. These charges will come in different forms and can be applied each time that you enter a trade, or as account fees or transactional charges.
Types Of CFD Trading Fees
There are various trading fees associated with trading CFDs. The types of fees include commissions, overnight charges and spreads. They may fluctuate significantly depending on the length of the position being held.
As with all costs when it comes to trading, make sure to do your research before opening a live account with any broker. Completing your due diligence will help you to prevent losing a significant percentage of profits to unexpected charges.
Some of the key CFD fees to look out for include:
Spreads
Spreads are a well-recognised method that trading platforms use to generate income. The spread is the difference between the “buy” and “sell” price of a financial instrument. It may also be referred to as the “bid-ask spread” or “buy-ask spread.”
To purchase any contract, you will be required to pay the ask price, and to sell it, you must pay the bid price. As with commission fees, spreads will vary depending on the volatility of the underlying market.
Brokers will often quote the price of an asset at a larger bid price compared to its live market price, to make money from the difference paid by traders. For example, typical spreads charged by eToro include the GBP/USD forex pair from 2 pips and silver and oil from 5 pips.
CFD spreads may be offered as floating or fixed. A fixed spread is the difference between the bid and the ask prices that remain constant regardless of market conditions. On the other hand, floating spread live prices fluctuate in response to market dynamics such as demand and trading activity.
Commissions
Typically, you will not be liable to pay CFD fees in the form of a commission on forex pairs or commodities investments. However, there are often commission fees when trading stocks. These costs are not set, and will vary depending on the broker and financial exchange in question.
Note that opening and closing a position is categorised as placing two separate trades, which means that you will be liable for a separate commission charge each time. For example, IG charges commission fees for investors trading global shares, as these CFDs are traded at the live market price.
In exchange for this real-time service, the broker applies a commission. Trading on the UK stock market with this broker would incur charges from 0.10% per side, with a minimum online fee of £10. Similarly, CMC Markets applies a commission charge of 0.10% to trade CFD shares on the UK market, with a minimum fee of £9.
Overnight Charges
Many brokers or exchanges apply CFD fees known as overnight charges for holding a long-term position. These contracts are considered to be an investment, meaning you are essentially being loaned the funds required to open your position, outside the initial deposit you’ve paid.
To keep your position open after 22:00 GMT, an interest adjustment will usually be made to your account to reflect the cost of keeping your position open overnight. This will be visible as a percentage in your account profit and loss statement.
The interest rate for CFD trades is normally calculated at a margin of around 2-3% above the overnight charges of the London Interbank rate. Formulas to calculate these costs will vary between asset classes and brokers. Fees are calculated according to market conditions, and can change on a daily basis.
The best brokers will provide an overnight fee calculator for CFD trades, so you can understand the exact interest financing charges applicable to your position. eToro, Plus500, IG, XTB, and CMC Markets are all examples of transparent brokers when it comes to CFD overnight holding costs.
Always double-check the specific CFD overnight financing charges before you open an overnight position. Remember that open positions held past 22.00 GMT on Fridays may be charged three days’ worth of overnight fees to cover the weekend.
Exchange Rate Fees
Depending on your trading account’s base currency, funding currency, and conversion settings, there may be a need for currency conversion. For example, as a UK investor, you may want to open a CFD trade in the EU stocks and shares market. If you hold an account with a GBP base currency, the broker may convert any realised profit, losses, funding, dividend adjustments or commissions from EUR back to GBP. These exchange costs are often quite minimal, typically around 0.5%.
CMC Markets provides the opportunity for UK traders to trade CFDs on US stocks without any applicable currency conversion charges. Degiro charges a one-off exchange connectivity fee for UK investors to set up trading opportunities outside of UK markets. The fee is levied upon those trading on worldwide exchanges including within Europe or the US. This fee is £2.50 (or 0.25% of your account value) per connected exchange, per calendar year.
UK Taxes
When trading CFDs, UK traders may be required to pay capital gains tax on profits. Unlike other forms of trading, CFDs are exempt from stamp duty costs, as you do not own the underlying asset. You can also use CFDs to offset any losses against profits from other CGT liable investments.
CFDs are therefore often utilised as a hedging tool due to their tax benefits. However, tax treatment depends on individual circumstances, so always ensure to check your taxes with a registered professional.
Leverage
One of the best ways to improve your profit potential with CFD trading is to utilise margin. However, as with all money lending, this comes with an interest payment requirement. CFD margin rates will be charged by the broker, as a payment back for the borrowing of funds.
Typically, this fee is charged as a percentage of the money borrowed. Amounts may vary significantly between exchanges. For example, margin rate fees at Interactive Brokers are 3.2% for GBP accounts with an account balance of less than £80,000.
Other Services
There are a few other minimal charges to be aware of with CFD fees. Dormant account fees may be applied if you leave a profile inactive for some time. These charges are typically applied after 3-12 months of inactivity. The broker will take a set deduction from your live trading account.
Additional software such as advanced charting packages may also come at a price. These are usually optional, depending on the broker. Although these features come at a cost, it is worth considering the improvements they could make to your overall trading experience.
Example
Here’s an example of investing in UK shares that includes common CFD trading fees:
You want to invest in CFDs in BP PLC shares, and you have £5000 to trade with. The current price of a share is £40.20, but you believe the share price will increase to £41.10. In this case, the bid-offer spread is £41.10 minus £40.20 = £0.90 per share.
This trade will be liable for a commission fee of 0.10% to open and close the position. If you plan to execute as a long-term position, an overnight financing fee will be applied: the broker has set this at the interbank rate plus a 2% margin fee.
With your £5000 investment, you can purchase 124 contracts at £40.20 per share, making a total investment amount of £4984. The share price of BP PLC does increase to £41.10 in 11 days. Those 124 contracts now have a value of £5096 (£41.10 x 124), meaning a total profit of £112.
The CFD trading fees will now be charged. These include:
- Commission – To open the position, you will be liable to pay £5 (0.10% x £5000). This will be applicable again when closing the position. Total: £10
- Overnight Charges – Interest rate fees plus the brokerage margin must be paid to hold positions open overnight. Let’s say this total was 2.7%. As the position was held for 11 days, a total of £4.05 must be paid. This is calculated as ((124 x £40.20) x (0.027/365)). As the position was live for 11 days until the price was hit, this is multiplied by 11.
In this example, your total profit after fees (but before taxes, payment for additional services or account charges) would be £97.95 (£112 – £5 – £4.05 – £5).
How To Compare CFD Fees
Spend some time comparing CFD trading fees at different brokers. Be cautious of those promoting “no commission” or “no fees” as there are often hidden charges applied elsewhere. Those brokers with the lowest CFD fees may not always provide the level of service required to succeed.
Some of the key factors to consider when comparing brokerages include:
- Length Of Trade – Does your trading strategy require long-term positions to be held open? As you will be trading on leverage, overnight charges may be a significant cost factor.
- Markets – Depending on the markets you are interested in trading, the types of fee will vary. For example, if you are planning to trade the UK stocks and share market, CFD commission-based fees are important to look out for. On the other hand, forex or commodities investments will usually require a comparison of spread costs.
- Platform And Tools – Access to third-party tools or advanced software may come at a cost. The best brokers will provide free demo account features, so you can get a feel for additional tools before committing to a payment.
Outside of CFD costs, other factors that should also be assessed when comparing brokers include access to responsive customer service, educational content, demo account services and mobile app compatibility.
Not all brokers will be completely transparent when it comes to CFD trading charges. It might be worth studying the terms and conditions page or contacting their customer support team if you cannot find information on any fee mentioned in the section above.
CFD Fees Vs Share Trading Fees
One of the major differences between trading CFDs and share trading is the fee structure. Kelvin Wong, a market analyst for CMC Markets points out that “A long position on a CFD requires a smaller amount of capital to initiate versus a similar position on a traditional share.”
This is because when trading a CFD, you are simply speculating on a market’s price without taking ownership of the underlying asset. During this transaction, you are only required to pay a fraction of the upfront value of your trade, known as the margin. This means you can hold a position of equivalent size in the stock market for less money.
When you buy a physical share you are paying for the full cost of the asset upfront. This additional cost will usually result in your fees being higher too.
Bottom Line On CFD Trading Fees
It is not surprising that many traders get confused by the charges they incur when trading CFDs. Fee structures can vary from broker to broker and from market to market.
Traders should always seek to minimise their CFD fees in order to build a greater profit margin over time. As CFDs are leveraged products, remember that trading is inherently risky and you could make a loss greater than your initial deposit.
Use our list of brokers with the lowest CFD fees to start trading.
FAQ
Do All Brokers Charge CFD Account Opening Fees?
The majority of CFD brokers do not charge new account registration fees for UK investors. Minimum deposit requirements or initial funding amounts may apply, however.
What CFD Fees Do I Need To Pay To Trade?
Charges and fees will vary between brokers and markets. The main costs to consider before opening a position include spreads/commissions, account fees, platform/tool fees, overnight charges, taxes and exchange rate fees.
Will I Need To Pay Taxes When Trading CFDs?
UK traders may be required to pay capital gains tax on profits. However, CFDs are exempt from stamp duty costs as investors do not own the underlying asset. Contact a tax advisor if you have any questions or concerns.
Are Inactivity CFD Fees Charged By All Brokers?
Inactivity fees are relatively common for CFD trading accounts, although these often apply once a profile has been dormant for a predefined period. For example, CMC Markets applies rolling dormant account fees of £10 per month if there has been no activity for 12 months. This is similar to IG charging £12 fees per month after 24 months of dormancy.
Where Can I Find A Broker’s CFD Fee Structure?
The best brokers will provide a transparent fee structure on their website or platform interface. This will include a breakdown of trading and non-trading charges. Trading fee calculators can also be a useful tool to estimate the potential net profit of a position. It’s worth contacting the broker’s customer service team if fee information is missing or unclear.