CFD Stock Trading
CFD stock trading is a popular method that traders use to speculate on the price movements of equities and the market as a whole. Investors can be bullish or bearish on their value without the need to physically purchase company shares.
Read on to find out what CFD stock trading is, how it works and how to get started. This article will also run through some popular strategies and a few trading tips to get you going. We have compiled a list of our top recommended CFD stockbrokers below.
Best CFD Stock Trading Brokers
Here is a summary of why we recommend these brokers in October 2025:
- Interactive Brokers - IBKR provides access to an unparalleled array of equity products originating from 24 diverse countries. Whether seeking capital appreciation, dividends, or voting rights, you can directly invest in stocks. Alternatively, you can engage in speculative trading on price movements through CFDs, futures and more than 13,000 ETFs. IBKR also enhanced its European equity derivatives offering in 2024 by adding trading on CBOE Europe Derivatives (CEDX).
- Plexytrade - Plexytrade's range of 48 US stock CFDs trails most competitors, though the selection of 15 popular global indices (including S&P 500, Nasdaq 100, and Dow Jones) is reasonable. Still, the lack of stock market research tools like stock screeners and the minimum deposit requirement to access the economic calendar (a typically free feature at other stock brokers) is disappointing.
- Capitalcore - Capitalcore offers just 18 stocks spanning major US firms like Apple, Netflix and Nvidia and a handful of futures indices. However, this falls way short of the 16,000+ global stocks and indices at alternatives like IG. Also, the lack of screeners and market insights results in a very limiting stock trading experience.
- Videforex - Trade binary options and CFDs on global stocks from US, European, Russian and Asian exchanges, as well as 37 indices covering a wide range of global markets. The access to stocks trumps many binary options brokers, especially since big names like Palantir, Apple and Meta were added to the web platform in 2025..
- Sage FX - Speculate on price movements of 37 US and European blue chip stock CFDs, including Adidas, Intel and Volkswagen. On the negative side, the selection of stocks is limited vs alternatives and direct share dealing isn't provided.
- xChief - xChief offers 100 US company stock CFDs for MT4 DirectFX and Classic+ account holders. Alongside popular multinationals like Apple and Coca-Cola, you can also speculate on several major stock indices with spreads from 2.
CFD Stock Trading Comparison
| Broker | CFD Leverage | Minimum Deposit | Minimum Trade | Regulators |
|---|---|---|---|---|
| Interactive Brokers | 1:50 | $0 | $100 | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Plexytrade | 1:2000 | $50 | 0.01 | - |
| Capitalcore | 1:2000 | $10 | 0.01 Lots (CFD/Forex), $1 (Binaries) | - |
| Videforex | 1:500 | $250 | $0.01 | - |
| Sage FX | 1:500 | $10 | 0.01 Lots | Pending |
| xChief | 1:1000 | $10 | 0.01 Lots | ASIC |
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
| FTSE Spread | 0.005% (£1 Min) |
|---|---|
| GBPUSD Spread | 0.08-0.20 bps x trade value |
| Stocks Spread | 0.003 |
| Leverage | 1:50 |
| Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower |
| Fractional Shares | Yes |
| Demo Account | Yes |
| Minimum Deposit | $0 |
| Automation | Yes |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Stock Exchanges
Interactive Brokers offers trading on 16 stock exchanges:
- Borsa Italiana
- CAC 40 Index France
- Chicago Mercantile Exchange
- Euronext
- IBEX 35
- Japan Exchange Group
- Korean Stock Exchange
- London Metal Exchange
- London Stock Exchange
- Nasdaq
- Nasdaq Nordic & Baltics
- New York Stock Exchange
- Russell 2000
- Shenzhen Stock Exchange
- Tadawul
- Toronto Stock Exchange
Pros
- With low commissions, tight spreads and a transparent fee structure, IBKR delivers a cost-effective environment for short-term traders.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
- IBKR continues to deliver unmatched access to global stocks with tens of thousands of equities available from 100+ market centres in 24 countries, most recently the Saudi Stock Exchange.
Cons
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
Plexytrade
"Plexytrade is a newcomer in the brokerage scene with attention-grabbing features like 1:2000 leverage, zero spreads on select instruments and fast execution speeds of less than 46 milliseconds. However, the absence of regulation is a significant concern, while the non-existent research and educational tools place it far behind industry frontrunners."
Plexytrade Quick Facts
| Bonus Offer | 120% Cash Welcome Bonus |
|---|---|
| FTSE Spread | 0.8 |
| GBPUSD Spread | 0.8 |
| Stocks Spread | 5 |
| Leverage | 1:2000 |
| Platforms | MT4, MT5 |
| Fractional Shares | No |
| Demo Account | Yes |
| Minimum Deposit | $50 |
| Automation | Yes |
| Account Currencies | USD, EUR |
Stock Exchanges
Plexytrade offers trading on 15 stock exchanges:
- Australian Securities Exchange (ASX)
- CAC 40 Index France
- DAX GER 40 Index
- Dow Jones
- Euronext
- FTSE UK Index
- Hang Seng
- Hong Kong Stock Exchange
- IBEX 35
- Japan Exchange Group
- Nasdaq
- New York Stock Exchange
- Russell 2000
- S&P 500
- SIX Swiss Exchange
Pros
- Plexytrade accommodates a range of trading methods and short-term strategies, including scalping, hedging, and automated trading.
- Despite lacking regulation, Plexytrade provides negative balance protection and reinforces safety protocols by holding client funds in segregated accounts.
- US residents are accepted as clients, distinguishing Plexytrade as one of the rare offshore brokers that cater to US-based traders.
Cons
- Plexytrade lacks regulation in major jurisdictions, significantly increasing the risks of opening an account and depositing funds.
- With around 100 instruments, Plexytrade restricts the flexibility of investors who prefer to trade across various assets, especially compared to Blackbull with its 26,000 securities.
- There are no social or copy trading features for inexperienced traders to replicate the trades of more experienced investors, trailing category leaders like eToro.
Capitalcore
"The major selling points of Capitalcore are its easy-to-use binary platform which offers a strong charting package from TradingView, plus its 'double up' and 'rollover' capabilities to replicate or extend short-term trades with a click. However, its weak regulatory oversight and non-existent education place it far behind the top brokers."
Capitalcore Quick Facts
| Bonus Offer | 40% Deposit Bonus |
|---|---|
| FTSE Spread | 25 |
| GBPUSD Spread | 0.5 |
| Stocks Spread | 1.5 (Apple) |
| Leverage | 1:2000 |
| Platforms | WebTrader, Pro |
| Fractional Shares | No |
| Demo Account | Yes |
| Minimum Deposit | $10 |
| Automation | No |
| Account Currencies | USD |
Stock Exchanges
Capitalcore offers trading on 5 stock exchanges:
- DAX GER 40 Index
- Dow Jones
- FTSE UK Index
- Nasdaq
- S&P 500
Pros
- Unlike most brokers, Capitalcore offers an unlimited demo account that takes under 5 minutes to open.
- The support team are available 24/7 and responded within minutes during testing with helpful responses.
- Capitalcore has added binary options trading on 30+ currency pairs, metals and crypto with one-click trading and payouts up to 95%.
Cons
- Platform support is limited to proprietary software, so there's no integration with the market-leading MetaTrader or cTrader, which offer built-in economic news and support automated trading.
- Capitalcore’s threadbare education and research seriously trail category leaders like IG, making it less suitable for aspiring traders.
- Capitalcore is not regulated by major financial authorities and has an unproven reputation, raising concerns about the safety of client funds.
Videforex
"Videforex will serve traders looking for a no-frills, easy-to-use platform to speculate on the direction of popular financial markets through binaries. With a sign-up process that takes a matter of minutes and a web-accessible platform, getting started is a breeze. "
Videforex Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| FTSE Spread | Floating from 0.2 |
| GBPUSD Spread | Floating from 0.1 |
| Stocks Spread | NA |
| Leverage | 1:500 |
| Platforms | TradingView |
| Fractional Shares | No |
| Demo Account | Yes |
| Minimum Deposit | $250 |
| Automation | Yes |
| Account Currencies | USD, EUR, GBP, AUD, RUB |
Stock Exchanges
Videforex offers trading on 7 stock exchanges:
- Dow Jones
- FTSE UK Index
- Hong Kong Stock Exchange
- IBEX 35
- Nasdaq
- S&P 500
- SIX Swiss Exchange
Pros
- Videforex regularly runs trading contests, offering practice opportunities and cash prizes to beginners and experienced traders, with position sizes from just ¢0.01.
- With the addition of over 60 new assets, Videforex now gives traders access to in-demand crypto (TON, ARB, PEPE, SHIB), top-performing tech stocks (Tesla, Meta, Nvidia, Amazon), and a more diverse FX portfolio (THB, ZAR, and MXN).
- Traders can earn up to 98% payouts on 100+ assets with the broker’s binary options, bringing it in line with competitors like IQCent.
Cons
- Videforex lacks authorization from a trusted regulator, meaning traders may receive little to zero safeguards like segregated client accounts.
- The client terminal needs improvements based on our latest tests, sporting sometimes slow and unresponsive widgets which could dampen the experience for day traders.
- The absence of any educational tools is a serious drawback for newer traders who can find blogs, videos and live trading sessions at category leaders.
Sage FX
"Sage FX will suit forex traders looking for high leverage and ECN spreads. The broker's prop trading service will also appeal to users looking for funded accounts with up to $200K available."
Tobias Robinson, Reviewer
Sage FX Quick Facts
| Bonus Offer | $1,500 trading competition |
|---|---|
| FTSE Spread | 5.0 |
| GBPUSD Spread | 0.9 |
| Stocks Spread | N/A |
| Leverage | 1:500 |
| Regulator | Pending |
| Platforms | TradeLocker |
| Fractional Shares | No |
| Demo Account | Yes |
| Minimum Deposit | $10 |
| Automation | Yes |
| Account Currencies | USD, EUR, GBP, CAD, AUD |
Stock Exchanges
Sage FX offers trading on 0 stock exchanges:
Pros
- Fast withdrawal processing
- Bonus offers and trading competitions
- Prop trading accounts with multiple funding tiers
Cons
- Relatively narrow range of asset classes
- Not regulated by any reputable body
- Lacks educational resources and other extra features
xChief
"xChief continues to prove popular with investors looking to trade highly leveraged CFDs on the popular MetaTrader platforms. The broker's rebate scheme and investment accounts will particularly appeal to seasoned traders. However, the lack of top-tier regulatory oversight is a major drawback."
xChief Quick Facts
| Bonus Offer | $100 No Deposit Bonus |
|---|---|
| FTSE Spread | 70 |
| GBPUSD Spread | 0.9 |
| Stocks Spread | 50 |
| Leverage | 1:1000 |
| Regulator | ASIC |
| Platforms | MT4, MT5 |
| Fractional Shares | No |
| Demo Account | Yes |
| Minimum Deposit | $10 |
| Automation | Yes |
| Account Currencies | USD, EUR, GBP, JPY, CHF |
Stock Exchanges
xChief offers trading on 14 stock exchanges:
- Australian Securities Exchange (ASX)
- CAC 40 Index France
- DAX GER 40 Index
- Deutsche Boerse
- Dow Jones
- Euronext
- FTSE UK Index
- Hang Seng
- Hong Kong Stock Exchange
- IBEX 35
- Japan Exchange Group
- Nasdaq
- New York Stock Exchange
- S&P 500
Pros
- The broker offers several account types to suit different traders, including a Cent account for beginners and pro-level hedging/netting accounts
- xChief offers STP/ECN execution with low spreads from 0.0 pips and low commission rates starting from $2.50 per side
- Traders can access a copy trading solution via the MetaQuotes Signals service
Cons
- The broker trails competitors when it comes to research tools and educational resources
- xChief is an offshore broker with weak regulatory oversight from the VFSC, so traders will receive limited safeguards
- Fees and minimums are imposed on most withdrawal methods, including a €60 minimum for SWIFT bank transfers
What Is CFD Stock Trading?
A contract for difference (CFD) is an agreement between a broker and a trader that states the latter will either pay or be paid the difference between the value of an asset at the start of the contract and the end. Typically, these contracts have no expiry date and can be opened and closed whenever the trader wishes.
CFD stock trading involves derivative instruments, which means that the trader does not purchase the asset itself, they only speculate upon its price movements.
Therefore, investors do not take ownership of the underlying asset. For example, purchasing a CFD on Tesla shares does not give the investor shares in the company, simply the opportunity to be paid if their value goes up.
How CFD Stock Trading Works
With CFD share trading, investors essentially invest, or speculate, on the price movement of a stock, with the capability to profit (or loss) from both bullish and bearish markets.
CFD stock trading can be carried out by either going long or short on an asset if they believe its price will rise or fall, respectively.
Profit (or loss) is then determined by the difference between the value of the stock when the position is opened and its value when it is closed. Commissions are usually charged to open and close a CFD, typically around 0.1% for UK stocks.
Let us look at a CFD stock trading example where an investor believes the value of Lloyds Banking Group stock will rise from its current point ask/bid price of 45.55/46.55 pence.
They then purchase 10,000 units going long, meaning they stake £4,655 (10,000 * 46.55p bid price), and the broker charges a 0.1% commission with a minimum fee of £8. Since the commission would only be £4.66 (0.1% of £4,655), the minimum charge of £8 is charged.
After eight hours, the value of the stock CFD has risen to 65.55/66.55 pence and the trader closes the contract for £6655 (10,000 * 66.55p), for a gross profit of £ 2,000 (£6655 – £4655).
However, another £8 commission charge is taken (the 0.1% charge of £6.56 is less than the minimum). So, the total commission taken is £16 taken from a gross profit of £2,000, leaving the trader with a net profit of £1,984.
The same process is followed for short CFDs, except the price difference is in the other direction. That is, the stock price dropping to 25.55/26.55p would produce the same profit.
CFD Stock Trading Vs Spot Stock Trading
So what is the difference between CFD stock trading and traditional (spot) stock trading? Are you better off CFD share trading or just share trading?
Spot stock trading would entail purchasing some company shares if you believe the stock price will increase. This would come with all the benefits of owning the shares, gaining voting rights, dividends etc.
However, if the stock price falls, you will lose money as the value of your holding has decreased.
CFD stock trading, on the other hand, does not provide ownership but allows you to profit (or lose) from bidirectional price movements and execute trades much more quickly, better facilitating day trading strategies.
Each share trading style has its benefits, for example, spot stocks are probably better if you wish to hold the shares for a long time, earn voting rights and dividend yields.
However, if you wish to speculate on short term price movements, CFD stock trading may be better for you.
CFDs also come with the opportunity to leverage your trades, borrowing a portion of the contract cost from the broker so that you can increase your market exposure and take larger positions.
Experienced investors may use CFDs to hedge against traditional stock holdings. If you are holding for the long term but believe it may do poorly in the short term, you can purchase a selling CFD to balance this out, without affecting your shareholdings.
The Influence Of CFDs On The Price Of Stocks
Does CFD stock trading affect stock prices in any way? The simple answer is no. CFDs are derivative contracts that are related to the price movement of stocks. When buying stock/share CFDs, the trader never actually buys or owns the underlying asset. Therefore, CFDs have no impact on the value of the stock they are based on.
What Platforms Can I Trade On
You might have heard that share CFD trading is only available on MetaTrader5 (MT5) but this is not the case. Even though it’s commonly associated with forex, CFD and share trading is possible on MetaTrader4 (MT4). However, MetaTrader5 was designed with CFDs in mind and therefore presents an easier interface and is more suited to a CFD stock/share trader.
There is also a large number of other, less popular, trading platforms that support CFD stock trading. Many brokers offer their own proprietary or commercial platforms, such as cTrader or NinjaTrader. If a broker offers CFD shares trading then they will almost always provide access to a platform that supports it.
CFD Stock Trading Strategies
With CFD stock trading, strategy is important. Here, we have highlighted a few of our favourite strategies, though more detail can be found on our strategies page:
Pair Trading
This strategy entails investing in two different stock CFDs, with one long position and one short. The two stocks should be highly correlated assets that have recently become less correlated.
The aim is to take advantage of a divergence between the two underlying assets. You open a long position on the weaker asset and a short position on the stronger one.
The direction of the market shouldn’t matter, you will be winning with one position and losing with the other.
Any potential gain is then based on the price difference between these assets, rather than the direction of their price movements.
Hedging
This is almost like a CFD stock trading insurance policy and works if you already own stocks or have open positions.
Let’s say you own stocks in Coca-Cola and you believe the value is going to drop in the short term. You don’t want to sell the stock, as in the medium or long-term, you expect it to recover.
This is where hedging comes in. You can go short on Coca-Cola and, if the price does drop, you can cash these in and balance out any losses from your original holding.
Check that your broker allows hedging prior to trading.
News Trading
News trading is all about staying up to date with the latest announcements and releases from different companies. These will have a large impact on the value of a company’s stocks. With news trading, there are two approaches.
Firstly, you can purchase CFD contracts before the announcement in an attempt to predict the reaction to the release and the effect it will have on a stock’s price, this can be high risk. The other method is to use CFD stock trading just after the announcement, this way you can see the initial change in value and follow it. You may not see the full price swing, but it is less risky.
Pros
- No stamp duty
- Higher leverage
- Instant order execution
- Trade short or long positions
- You can offset losses against profit for tax purposes
- You can use CFDs to hedge against traditional stock holdings
Cons
- Lack of ownership and voting rights
- Financing fees for holding overnight
- High concentration levels are required
- You won’t earn dividends from holding contracts
- You can incur large losses
How To Start CFD Stock Trading
If you are looking to start trading stock CFDs, follow this step-by-step guide:
Choose A Broker
The first thing to do to begin CFD stock trading is to find a broker. There are many brokers out there, so selecting the best one can be daunting. Here are a few things to compare:
- Whether they are regulated
- Customer service levels
- Financing (overnight) fees
- How the trading platform works/feels
- Deposit and withdrawal minimums/fees
- Commissions or opening and closing charges
- The stocks they offer or exchanges they have access to
Research The Market
Once you’ve found a broker and opened an account, you should research the market. Look at the trends for different stocks, 1- or 3-year price charts can often show regular patterns. Also, search news sites to see if there are any new developments related to the companies you’re looking at.
Open A Position
If you have found a suitable stock and know whether you want to go short or long, you are ready to open a position and begin CFD stock trading. Purchase the number of CFD contracts you are comfortable with and be sure to keep an eye on the margin you need to put down and any potential losses.
Implement Risk Management Strategies
CFD stock trading comes with a level of risk, especially if you are using margin.
It is always wise to implement some form of risk management, whether it be stop loss orders that automatically close the contract once a predefined loss has been seen or a complex combination of trailing stops, hedging and size calculations.
Monitor And Close Position
Make sure you are constantly checking the market and be ready to close at any point. If you are day trading, you will want to close multiple times within a day. Alternatively, if you have a longer-term approach, you should still keep an eye on the market, and use trade calculators to ensure overnight fees are taken into account.
Trading Tips
These tips could enhance your CFD stock trading skills:
- Do Your Homework: Do plenty of market research before you purchase any CFD stock contracts. Make sure you have seen all the past charts, trends and dips. History may repeat itself, so give yourself the best chance by learning about the past.
- Follow The News: News releases have a huge impact on stock prices. Keep up to date on any new announcements and stay ahead of the curve.
- Use A Demo Account: Demo accounts are your friend. They let you practise strategies, refine approaches and get a feel for platforms, all without spending real money. Take time on a CFD share trading demo account before you jump into the real deal.
- Keep Learning: There are so many educational resources available for free that you can use to your advantage. YouTube has some great CFD share trading demo videos and there is a wealth of books and PDFs available on the subject.
Final Word
CFD stock trading presents a great way to access a range of different stocks on the market without owning the underlying asset.
Many experienced traders are adding stock CFDs to their portfolios, both as a stand-alone instrument and as a means of hedging existing holdings. Follow our guide to start CFD share trading today and make use of our tips and strategies to give yourself a head start. Also, check out our list of top recommended CFD stock trading brokers.
FAQs
Do You Own The Stock When CFD Stock Trading?
No, you do not own the underlying stock when you trade stock CFDs. You simply speculate and make a profit or a loss based on the price movement of the stock.
Is CFD Stock Trading Legal In The UK?
Yes, CFD stock trading is legal in the UK. Brokerages offering stock CFDs are regulated by the Financial Conduct Authority (FCA).
What Is The Best CFD Stock To Trade?
There is no simple answer as the market fluctuates so much. Stocks with the highest trading volume, liquidity and volatility are generally the best for traders.
Is CFD Stock Trading Taxable In The UK?
Yes, CFD stock trading is taxable in the UK. It is exempt from stamp duty, but any potential profits are eligible for capital gains tax (CGT) – over a certain threshold.
Is CFD Stock Trading Safe?
No financial instrument is 100% safe as the markets are inherently uncertain and constantly fluctuating. CFD stock trading can be carried out with reduced, although still very present, risk through the use of robust risk management strategies and limited leverage.