CFD Trading In Singapore
CFD trading in Singapore is big business. In fact, it’s the fourth-largest CFD market globally. Here we’ll look at how traders can get started, the best CFD brokerage firms and platforms in Singapore 2024, plus answer any regulatory and legal questions.
Best CFD Brokers in Singapore
What Is A CFD?
A contract for difference (CFD) is a tradable agreement to exchange the difference in the value of an asset. If we take stocks and shares as an example, you could speculate on the change in value of the Singapore Stock Exchange, or on the share price of a specific stock, without actually owning the underlying asset.
Online CFD trading is attractive partly because it’s available in so many markets. You can trade CFDs on stocks, forex, commodities, and cryptocurrency. But despite wide-ranging market access, stick to classes you understand.
CFD traders in Singapore can also benefit from leverage, meaning you can borrow money from a brokerage to increase your position size. This is also known as trading on margin. The benefit of trading on leverage is that by increasing your trade size you can amplify potential profits. Of course, it also means the possibility of larger losses.
How To Trade
CFD trading in Singapore is straightforward:
- Open an account – Most Singaporean traders benefit from instant account activation once their ID and address have been validated. Traders can then consider finance options and fund their account.
- Find an opportunity – Informed by your strategy, identify a market opportunity to use a CFD instrument, such as on stocks.
- Enter a position – On your trading platform, take a position depending on whether you think price will rise or fall.
- Risk management – Set a stop-loss order to automatically close out a trade when losses reach a certain point. Use a stop-limit order to automatically protect profits when they hit a specific level.
- Monitor & close – Keep an eye on your charting software for real-time changes to the market. If you haven’t set stop-loss and stop-limit orders, close out the trade when you’re ready.
Which CFD brokerage account is best in Singapore will depend on user needs. Most providers have a tiered account system with varying minimum deposits. In general, the greater the minimum investment required, the more competitive the fees, the better the leverage options, and the greater the access to customer support.
The best online CFD trading platform in Singapore for one trader might feel clunky and lacking to the next. With that said, MetaTrader (MT4) and WebTrader are popular options. Some companies also use their own proprietary software, which can allow for extensive customisation.
Regardless of the system, staple requirements should be prompt deposits and withdrawals. Also essential are intuitive pattern recognition tools for analysing a stock index, for example. Mobile traders will need to check the platform is accessible through an Android or iOS app. Overall, choose a system that will complement your strategy. And be wary of opting for the cheapest trading platform as you want the best tools at your disposal.
How to Choose a Brokerage
The number of online CFD brokerages in Singapore is growing. Fortunately, the competition means providers are offering lower fees, ample products, and excellent platforms.
When doing your comparison, consider:
- Costs – Commissions and spreads will eat into returns. So, make sure you’re aware of all the trading fees before you open an account.
- Platform – MetaTrader (MT4) is the most popular, but bespoke software can allow for a more personalised feel. Request a demo account to explore the platform before you invest money.
- Customer service – Opt for the cheapest online brokerage in Singapore and you may find customer support, be it through live chat or the phone, just isn’t available when you really need it.
- Additional tools – What else can they offer to improve your CFD trading success? Automated trading algorithms can streamline an already proven strategy, for example.
According to customer reviews, some of the best online CFD trading brokerages in Singapore are:
- Maybank Kim Eng – Traders from Singapore can get up to 20x leverage on this DMA platform.
- CMC Markets – One of the largest choices in Singapore, CMC Markets has a huge offering with competitive leverage.
- IG Markets – IG Markets receives great customer reviews, offering CFDs in indices, shares, FX, commodities, and more. IG Markets also offers an ECN trading account.
- Phillip CFD – Although smaller than some of the others on this list, it is reputable with a long list of loyal Singaporean CFD traders.
- Oanda – A well-established international firm, Oanda is particularly good for traders interested in CFDs in forex and cryptocurrency.
- DBS Vickers – The popular online trading platform offers a suite of CFDs to Singapore traders, including across forex, stocks, and commodities. The platform is also available on a mobile-friendly app and provides extensive market insights.
- Interactive Brokers – IB offers impressive commission rates, but they do charge for basic tools such as market data and news insights.
For further guidance on CFD brokerage firms, see here.
CFD trading in Singapore is competitive. So, the more additional educational resources you can get your hands on the better. Head to online forums, such as HardwareZone for tips from Singapore traders. Videos, newsletters and demo accounts are also all great ways to hone your CFD shares strategy, for example.
For further guidance on day trading learning, see here.
CFD trading in Singapore is hugely popular. Giving investors access to a breadth of markets with high leverage options, CFDs appeal to traders of all experience levels. It is true the regulatory oversight isn’t as robust as in other jurisdictions, such as the UK or US. However, the best trading platforms in Singapore still make for a great environment to trade CFDs.
How can I trade CFDs in Singapore?
To start CFD trading in Singapore, sign up at an online brokerage, fund your account, and take a position when you see an opportunity. But make sure you have a clear strategy and risk management tools in place before you put real money on the line.
Is CFD trading legal in Singapore?
CFD trading in Singapore is legal and regulated by the Monetary Authority of Singapore (MAS), although as a relatively new market, MAS has a lax reputation. Nonetheless, all brokers should be licensed with the MAS Financial Institutions Directory. As part of your due diligence, check the provider’s website for a license number.
Part of the protection afforded to those trading CFDs in Singapore with a regulated broker is that client funds are segregated. If the provider were to go bankrupt, user funds would be protected. Regulated brokers are also required to issue prospective clients with a comprehensive list of risks.
Which CFD trading account is best in Singapore?
The best trading account will depend on your needs. Consider the minimum account deposit, speed of payment methods, and the customer support available. Also check customer reviews online.
What’s the best CFD trading platform in Singapore?
Whilst there isn’t a universal best platform in Singapore, MetaTrader (MT4) is the most popular. With that said, the bespoke software available at some providers often allows for customisation.
How much money do I need to start CFD trading?
Minimum deposits vary between platforms, however you can start CFD trading in Singapore with S$250.