CFD Trading In India

CFD trading in India can open the door to lucrative markets. But firstly, is online CFD investing allowed and legal in India? We’ll explain the rules before looking at the best trading brokers and platforms.

Best CFD Brokers in India

FXTM Are leading forex and CFD brokers. Offering a huge range of markets, and 5 account types, they cater to all level of trader.
XM.com Offer a range of Account types and a low minimum deposit to appeal to all levels of trader. With 1000+ markets and low spreads they offer a great service.
Forex.com boast a global reputation. Regulated in the UK, US and Canada they offer a huge range of markets, not just forex, and offer very tight spreads and a cutting edge platform.
Trade Forex on 0.0 pip spreads with the world's leading True ECN forex broker - IC Markets.
Trading 212 Offer a truly mobile trading experience. With tight spreads and a huge range of markets, they offer a dynamic and detailed trading environment.
Fusion Markets are delivering low cost forex and CFD trading via low spreads and trading costs. Their message is - Stop paying too much to trade
Alpari offer forex and CFD trading across a big range of markets with low spreads and a range of account types that deliver for every level of trader from beginner to professional.
AxiTrader offers competitive spreads on a large range of Forex and CFD markets, integrated into the MetaTrader 4 platform. FCA and ASIC regulated.
69.6% of retail investor accounts lose money when trading CFDs with this provider
Markets.com offer CFDs across a huge range of assets from shares and indices to commodities and cryptocurrencies.
easyMarkets.com - Simply Honest. Trade CFDs on Forex, Commodities, Indices, Shares & Cryptos With a Top Rated Forex Broker
ATFX are an award winning, UK regulated broker. Offering Forex and CFDs with competitive spreads and a customer service focus.
Global brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features.
Deriv.com are a new brokerage, offering binary options and CFD trading
Vantage FX are a Raw ECN Forex broker, regulated by ASIC is Australia. Boasting MT4, MT5 and Webtrader platforms, a range of account types and a deposit bonus of up to 50%
SpreadEx offer spread betting on Financials with a range of tight spread markets. Popular award winning, UK regulated broker.
Binary.com are the established pioneers of binary options. The choice of the advanced trader, Binary.com offer the greatest flexibility of any binary broker. They also offer Forex and CFD via the MT5 platform.
NinjaTrader offer Traders Futures and Forex trading. Use Auto-trade algorithmic strategies and configure your own trading platform, and trade at the lowest costs.
IG offer spread betting, CFD and Forex trading across a range of markets. They are FCA regulated, boast a great trading app and have a 40 year track record of excellence.
Dukascopy is a Swiss-based forex, CFD, and binary options broker
IronFX offers online trading in forex, stocks, futures, commodities and cryptocurrencies
Ayondo offer trading across a huge range of markets and assets. They also offer negative balance protection and social trading.
CFDs are available on thousands of markets, including forex, indices, shares, and commodities
Libertex - Trade Online. Libertex offer CFD and Forex trading, with fixed commissions and no hidden costs.
Zulutrade provide multiple automation and copy trading options across forex, indices, stocks, cryptocurrency and commodities markets
New Forex broker Videforex can accept US clients and accounts can be funded in a range of cryptocurrencies. Payouts reach 95% per trade.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Multi-Award winning broker. Specialising in Forex but also offering stocks and tight spreads on CFDs and Spread betting across a huge range of markets.
Finq.com offer a great all round service with trading on 2100+ assets and immediate bonus offers. $50 Welcome Bonus & Up to 30% Deposit Bonus.
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See all CFD Brokers

What Is A CFD?

A contract for difference (CFD) is a derivative, meaning you don’t take ownership of the underlying security. Essentially, two parties agree to exchange the difference between the current asset’s price and the market value at the contract close.

Let’s say you were trading CFDs on Indian stocks, such as Coal India. If the market moved against you, you would pay the broker the difference between the current market price and the value of the asset at the contract time. If the market moved in your favour, the broker would instead pay you the difference.

Markets

CFD trading in India is attractive because it allows for market diversification. You can trade on stocks and shares, forex, futures, options, gold, and more. And because online CFDs are a relatively straightforward instrument, it’s easy to switch between commodity trading and the Indian stock market index, for example.

Finance

The other benefit of CFDs is the ability to trade on leverage. Brokers take collateral, known as margin, and then lend you funds so you can take position sizes that wouldn’t be possible with your cash balance alone. Not only does this increase the size of possible returns, but it also means you have capital left to take positions elsewhere. On the flip side, leveraged investing does increase risk exposure.

For more information on CFD basics, including day trading strategies, see here.

Whether CFD trading in India is legal and allowed is a grey area. The Securities and Exchange Board of India (SEBI) hasn’t yet rolled out laws to regulate CFDs. As a result, there isn’t a licensing system, which means you can’t find regulated brokerages based in India. Instead there are many unlicensed websites, where users won’t receive any legal protection.

So, if you want to trade CFDs on Indian stocks, for example, you should turn to companies based outside of India. Likewise, Indian residents will need to turn to offshore providers.

How to Choose a CFD Trading Broker

The good news is there is a long list of CFD Brokers in India. Key considerations when choosing a provider include:

  • Regulation – Make sure the broker holds a license with at least one of the following regulatory bodies: UK Financial Conduct Authority (FCA), Malta Financial Services Authority (MFSA), European Securities and Markets Authority (ESMA), Cyprus Securities and Exchange Commission (CySEC), Australian Securities and Investments Commission (ASIC).
  • Reputation – Not only is it important that the exchange is licensed with a respected body, but also that it gets positive customer reviews.
  • Mobile apps – Online CFD trading in India is commonly done via a mobile app. So, check the broker’s platform will be compatible with your mobile device. Also check you can make deposits and withdrawals from your phone.
  • Markets – One of the merits of CFD investing is wide-ranging products. With that in mind, check you’ll have exposure to all the markets you want, such as Indian stock market indices.
  • Customer service – Fast and straightforward access to customer support in a language you can understand is important. You don’t want to be jumping through hoops when your money is on the line. Also, if companies are based in different time zones to you, make sure you’ll have access to support during the times you’ll be active.
  • Fees – Fees usually come in the form of commissions and spreads. Commissions will be paid on each trade while spreads will include a mark-up for the broker’s services. If you wrack up serious trading volumes, even small cost differentials will add up.

See our list of the best online CFD trading brokers.

Best Platforms

What the best online platform is for CFD trading in India will be down to the user. With that said, the MetaTrader 4 (MT4) desktop and mobile platform is the most widely used. It’s reliable, easy to pick up, and allows for advanced charting and pattern analysis. The Traders Workstation (TWS) is another popular choice. Fortunately, many brokers today offer multiple options. Sign up for a demo account and have a play around to see which system works for you.

Final Word

CFD trading in India is allowed, however, there isn’t the robust legal protection found elsewhere. Signing up with a broker from India is therefore risky. Instead, it’s worth choosing a broker licensed in another jurisdiction. The best brokers and platforms can be found on our list.

FAQ

CFD trading in India is legal and allowed. However, because there isn’t effective regulatory oversight through a licensing system, Indian investors will need to open accounts with respected offshore brokers. Non-Indian residents can also trade CFDs on Indian stocks through offshore brokerages.

How do I trade CFDs in India?

To start day trading CFDs in India, you will first need to open an account with a licensed broker. Once you’ve deposited funds into your account you can then take a position on your trading platform. For guidance on CFD trading strategies, including risk management advice, see here.

How much money do I need to start CFD trading in India?

Minimum account deposits vary among brokers, but you can start trading CFDs with 4,000 INR. Margin requirements will also change depending on the provider, but are often between 5% and 25%.

Is it free to make deposits and withdrawals CFD trading in India?

Whilst deposits and withdrawals are usually free, if you’re using an offshore CFD broker there may be a currency conversion charge.

Do I need to pay taxes on CFD trading in India?

Profits generated from CFD trading in India may be taxable. The extent of your tax obligations will depend on how your trading activity is classed. See here for further guidance on day trading taxes.