The Trading Offer – what does the CFD Broker offer?
Trading in CFD has become one of the most popular trading options used by private traders. As such, the number of CFD brokers on the market has increased accordingly, so it is not easy for traders to get an overview of what is available.
When choosing a broker, an aspect that is particularly important is the trade offer. Versatility in this area is a vital factor even for beginners – with the focus being on tradable underlying assets. What does the broker actually offer? Some financial service providers specialise in stock CFDs. However, if you want to broaden your scope as an investor, this will not be enough.
From indices to raw materials
A broker is attractive if their offer can be as broad as possible. Many suppliers score points on this in our broker tests, as it is often possible to trade contracts for difference on indices, commodities, foreign exchange currencies and equities – four assets that are especially popular and provide a very good basis for trading. However, in a comparison, you should take a closer look to get an idea of how the broker is positioned with respect to the underlying assets.
Conditions: Costs of CFD trading
In a broker comparison it is particularly important to have a look at the fees, and the spreads are highly relevant here. These are the fees that are due for each trade. The broker usually lists the spreads on their website, so you can see whether they are fixed or variable spreads. The advantage here is that you can achieve an overview of the approximate costs before you register. In a CFD broker comparison you should take care to scrutinise the spreads of the most common underlying assets very carefully.
Possible additional fees
Trading costs are not always listed in a transparent way. In addition to the spreads, you should inform yourself about possible commissions. Some providers charge a commission for some products but not for others. In addition, check for any extra fees on the trading account. As a rule, the accounts are free of charge, but some brokers charge an inactivity fee, which should be noted in the terms & conditions. A good comparison should highlight any additional costs, if they are expected.
CFD brokers with multiple account models
It is quite possible that a CFD broker will offer different account models. Traders may benefit from this, as the costs and advantages often vary, and are relevant to different levels of experience. Some accounts are especially interesting if, for example, the account offers trading with fixed spreads. In that case, the more actively you trade, the lower the cost of trading, so it may be an important point to pay attention to in a comparison. Pay attention to other points as well, such as whether a better service or other services are available depending on the account model.
The minimum deposit amount is another criteria included in the comparison. Although it gives no indication of whether the broker is reputable, it is important for many traders when deciding whether they want to open an account. CFD trading is especially interesting for small investors. If that describes you, a high minimum deposit can be a significant disadvantage. Since brokers know that CFDs appeal primarily to retail investors, they usually set a small minimum deposit. On average, you might expect it to be around 100 euros.
CFD trading platforms and mobile trading
The trading platform is a particularly important aspect for any broker, so make sure that the available software is powerful, reliable and easy to use. It should allow for a concise overview of your trading activities and also provide assistance in developing a strategy.
Advantages of a good trading platform are:
- Intuitive handling even for beginners
- The widest variety of tools possible
- Customisable interface
Some brokers may provide multiple trading platforms, but many rely on a proprietary platform that allows them to design a custom experience and better respond to clients‘ needs. The tool selection is often much better with proprietary software too. Nevertheless, the majority of vendors also offer proven trading platforms such as the popular MetaTrader 4. If you want a good CFD experience, you should check to make sure the software will meet your needs. Most brokers also provide apps and mobile software solutions to give their customers as much flexibility as possible. As such, trading is usually also possible on the go, via smartphone, tablet or iPad.
Usability of the CFD broker‘s website
Further criteria in a broker comparison is the user-friendly aspect of the broker’s website. With the question ‘who is the best CFD provider?’ in mind, the focus is not just on usability, but also in assessing the site as a first point of contact for a trader. The most important information should be easy to find and any initial questions that traders might have should be answered. Make sure that all relevant content is available in a language that you understand.
The following information should be easily available:
- Underlying assets
- Account models and platforms
- Spreads and other fees
- Contact details and information on regulation
Many brokers are based overseas and operate internationally, so the website is often English-speaking. But as a rule, if you are not automatically directed to the English language version, you should have the option of selecting your language in the header area of the website. At the very least, legal documents, the price-performance-overview and support should be available in your language.
Customer support – contact in case of emergencies
Customer service is a topic of particular interest in CFD trading whenever you have a problem. Basically, the most important questions should be clarified on the website. Some brokers provide a FAQ section, which usually gives you some helpful answers. Since this is not always sufficient, it is advisable to test the customer support options. Of particular interest here are the contact paths, the times of availability and the competence of the customer service staff.
In order for a CFD broker to excel in the field of customer service, a provider should be available at those times when you will primarily need their services. Some providers are available 24 hours a day, others only on weekdays or at fixed times until the early evening. Moreover, it is recommended to take a closer look at the contact options – a live chat option is particularly convenient and has the advantage of allowing you to continue to trade without needing to open an extra mail window or a form. Besides, you will usually receive an answer directly. A hotline can also be a good solution for communication – just be sure to check in advance if there are any charges.
Methods for deposit and withdrawal
If you have found a broker who could be the best CFD provider for you, a closer look at the methods of payment is in order. Making a deposit into your account with the CFD broker is the first step to start trading. As a rule, a wide variety of payment options are accepted.
Common methods include:
- Deposit by credit card
- Deposit through online services such as Skrill, Paypal or Neteller
- Deposit via SOFORT transfer
Most brokers give their customers a lot of flexibility here. Many traders still like to use a credit card as a means of payment, as transactions are quick and safe. Payments by bank transfer are very secure too – though this is not always the first choice due to the longer processing time. Neteller, Skrill and SOFORT transfer are now also available at many brokers. When you consider the payment methods, keep in mind that it is sometimes important to be able to act quickly. Other important aspects to consider are possible fees and limits, which you should check in advance.
Additional offers: CFD demo accounts, webinars and more
Those who want to establish themselves as the best CFD broker for beginners nowadays need to offer extra incentives – such as a demo account, and further education options such as e-books, webinars, video courses, tips on strategies or lexicons. However, quantity is not always crucial here – and not only beginners, but also advanced traders may benefit from offers such as these. It is also a good idea to check which trading tools and extras are available, such as business calendars or automatic trading systems.
Take advantage of a CFD demo account
If you want to gain CFD experience in trading without investing your own capital, a demo account is the answer. A CFD demo account allows you to familiarise yourself with the platform and try out trading. A demo account is very useful for testing strategies. Some brokers make their demo accounts available for only a limited time. This should not exclude them from your options, but an unlimited account is particularly advantageous. The amount of virtual credit offered is also an incentive – you should make sure that you trade with real trading conditions in the test account, so it is as similar as possible to a real trading account.
Regulation and deposit insurance – is the CFD Broker reputable?
With financial tools such as CFDs, fraud can never be completely ruled out, but regulation at least provides information on whether a provider’s activities are controlled, and action is taken if necessary. To obtain a licence, a broker must meet certain requirements. Regulation is the responsibility of the respective financial regulator at the headquarters of the broker. If a broker offers services in other countries as well, it is usually also registered with local authorities in those countries.
Security of client funds and data
In order to prevent CFD fraud, it is advisable to use your broker comparison to identify a provider who offers encrypted data transfer. Without this, there is always a risk that your data could be intercepted and abused by hackers. However, this is not the only consideration when searching for the best CFD provider. In addition to encryption and regulation, deposit insurance is particularly important. You should check if your deposits are insured, and up to what amount. It is also advisable to know whether the broker keeps assets and client funds in separate accounts, which is usually the case.
Therefore, in your broker comparison, the following points should be considered:
- Deposit insurance
- Data encryption
Brokers put to the test: Reviews in the trade press and awards
Once you think you’ve found a provider that meets your requirements, it might be interesting to see if the broker is mentioned in the media or has received any awards. Specialist magazines conduct regular tests, giving out awards and titles such as ‘Best CFD Broker’. A look at current reviews may also be worthwhile. They show up-to-date information on a broker, the offers they provide and how they are rated by the press. Usually, brokers will refer to press coverage on their websites and link to various relevant reports.
In the financial press and on the various websites that provide CFD trading coverage, brokers regularly receive awards. Often the support, the platform, the trade offer or the complete package are evaluated. First place goes to the provider who is outstanding in these respective areas. Look for titles such as ‘Best Trading Platform’ or ‘Best CFD Broker’. You’ll also find customer opinions about the respective brokers, but these are subjective and should not be as crucial to your decision as anything the financial press have to say about the broker.
Market overview and market outlook
CFD trading has experienced a significant upswing in recent years. Many small and inexperienced investors appreciate the ease with which they can become active in the cash markets or futures markets. As the number of underlying assets also increases, the market is sure to become more attractive to experienced traders. Although interest is high, traders should be aware that CFDs are speculative products and are always risky. However, CFDs offer a significant advantage – traders have the opportunity to act much more effectively than if they invest directly in the underlying assets. The possibility for diversity is significant, and the increasingly popular cryptocurrencies market is accessible with CFDs too.
Assessing future developments
Trading on the stock exchange, and also outside the stock exchange, has developed in recent years. With more and more brokers offering the possibility to trade online, there are increasing possibilities. But what about the future of CFDs as products? Since they are a very transparent financial instrument and offer the possibility to trade high volume with low capital expenditure, it can be assumed that the development of CFDs will continue to be positive, making them a suitable future investment.
Using comparisons and reviews when choosing a broker
Our comparisons and awards will guide you to the providers that have convinced us, as well as our readers, in our CFD broker test. Nevertheless, a broker should meet your individual requirements. When making your decision, consider the criteria important to you and make a shortlist. After that, we recommend a broker comparison to take a closer look at all aspects of the brokerage – such as regulation and deposit insurance, costs, trading offers and software.
Being active in CFD trading does not mean that other types of investment won’t be of interest to you. Many brokers provide a very broad range of offerings, and in addition to CFD trading, for example, many provide stock trading or forex trading.
If you are informed about the various CFD brokers and are interested in trading cryptocurrencies, then a crypto broker comparison might be useful. With some providers, you can speculate on the prices of Bitcoin and other digital currencies via CFDs. AskTraders provides a wealth of information on a range of trading opportunities. Take advantage of our free comparisons and browse our broker experience reports to find the right CFD broker for you.