CFD Trading In South Africa

CFD trading in South Africa has become increasingly popular. In fact, CFDs are challenging single stock futures in terms of activity on the Johannesburg Stock Exchange (JSE). This means there are a growing number of brokers and platforms for traders to choose from. Here we’ll run through some of the best, as well as explaining the tax implications of CFD trading in South Africa.

Top CFD Brokers in South Africa

A trader with a Plus500 account can trade CFDs on underlying financial instruments such as Forex, Stocks, Commodities, Cryptocurrency, Options and Indices. With tight spreads and no commission, they are a leading global brand. Plus500 offer a first deposit bonus, up to $10,000 AUD
Trade Forex on 0.0 pip spreads with the world's leading True ECN forex broker - IC Markets.
Leading forex and CFD broker regulated in Ireland, Australia, Canada and South Africa. Avatrade are particularly strong in integration, including MT4
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.
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. Win 1KG of Gold by trading during September!
XTB is one of the largest stock exchange-listed FX & CFD brokers in the world, offering access to over 2000 instruments from two platforms: its own award-winning xStation 5 and the traditional MT4.
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.
Axi is a global online FX and CFD trading company, trusted by 60,000+ ambitious customers in 100+ countries around the world.
72.6% 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.
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
Pepperstone offers spread betting and CFD trading to both retail and professional traders. Clients can trade FX, indices and more on MT4, MT5 and cTrader platforms.
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.
FXCM are an FCA regulated, London based broker. Companies under the FXCM umbrella are also regulated in Australia and Canada.
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%
Trade CFDs on currency pairs, precious metals and energies, plus indices and shares.
CFDs are available on multiple markets, including FX, indices, shares, commodities & cryptocurrency
FXTM Are leading forex and CFD brokers. Offering a huge range of markets, and 6 account types, they cater to all level of trader.
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.
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
Trade CFDs in a range of financial markets.
Trade thousands of CFDs across a range of markets with up to 1:500 leverage.
Trade CFDs on forex, indices, shares, precious metals, and energies.
Trade CFDs on currency pairs, indices, & commodities with tight spreads.
Ayondo offer trading across a huge range of markets and assets. They also offer negative balance protection and social trading.
Trade CFDs with high leverage & low spreads.
IronFX offers online trading in forex, stocks, futures, commodities and cryptocurrencies
CFDs available on major indexes, stocks, FX, commodities, and cryptocurrency
Access multiple financial markets with CFDs.
CFDs are available on thousands of markets, including forex, indices, shares, and commodities
Trade CFDs with tight spreads and leverage.
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.
Trade nearly 200+ global stocks at 24Option via CFDs. Spreads are competitive and stop loss and take profit orders are available. Even trade new cannabis firms in Canada!
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. Up to $4000 in Deposit Bonuses.
Show All Brokers ⇩

See all CFD Brokers

How Does CFD Trading Work?

Firstly, what are CFDs and how do they work? A CFD, which stands for contract for difference, is a tradable derivative instrument that allows speculation on the price movement of an asset without owning the underlying security. CFDs are available on stock market indices, forex, commodities, cryptocurrencies, futures, options, and more.

For further guidance on day trading CFDs, including strategies, see here.

CFD trading is legal in South Africa. The country’s Financial Services Board (FSB) oversees CFD and forex trading. In addition, many established brokers dealing CFDs in South Africa are regulated by other reputable bodies, including the Cyprus Securities and Exchange Commission (CySEC) and the UK Financial Conduct Authority (FCA). As a result, traders in South Africa could benefit from the legal protection of several trusted bodies.

CFDs Vs Single Stock Futures

Single stock futures (SSFs) contracts are similar to CFDs and hugely popular in South Africa. With that said, there are some important distinctions. Firstly, CFDs do not expire, whereas single stock futures do and they incur a rollover fee if you still hold them at expiry. With CFD investments you get one CFD per contract, single stock futures on the other hand, are 100 shares per contract. Also, equity CFDs do not incur dividend exposure, unlike single stock futures.

How to Choose a Broker

The best CFD trading brokers in South Africa offer competitive fees, an easy account opening process, and an intuitive platform. XTB is a particularly popular option among traders in South Africa – promising low CFD stock fees, plus prompt deposits and withdrawals. Another prominent player in South Africa is XM, which offers a simple market maker account, a direct market access account, and a hybrid option. City Index and IG also offer competitive fees, excellent educational tools, and a social trading environment.

To help you sift through the many options, we’ve listed the best CFD trading brokers here.

Platforms

There are multiple platforms suitable for online CFD trading in South Africa. MetaTrader (MT4) currently defines the market. But other popular software options include L2 Dealer and ProRealTime. Which one is best will depend on the trading strategies used.

When picking an online platform, traders should look for:

  • A fast and easy to learn platform
  • A powerful mobile app for mobile traders
  • Sophisticated charting and pattern analysis
  • Positive customer reviews from other traders
  • Comprehensive risk management alerts and tools

Tax

Before you open an account, you should understand how CFD taxes work in South Africa. The South African Revenue Service (SARS) treat profits from CFD trading as gross income, meaning tax may be payable under the Income Tax Act. Note expenses can be deducted from gross income. Keeping a detailed record of trades will help make declaring profits on annual tax returns more straightforward.

For more information on day trading taxes, see here.

Education

For beginners and experienced CFD traders in South Africa, there are excellent resources available. The Johannesburg Stock Exchange and the Standard Bank of South Africa have both published useful PDFs that explore how CFDs work, including definitions and trading strategies. Traders looking for a more immersive learning environment than PDFs can also sign up for online courses that show how to trade CFDs successfully, using real-life examples.

Final Word

CFD trading in South Africa is legal and popular among retail investors. There are many reputable domestic brokers and platforms on the market. Alternatively, traders can sign up to international brokers and access CFDs on markets in South Africa, including stocks, shares, and commodity trading.

FAQ

CFD trading is legal in South Africa. The Financial Services Board (FSB) regulates the CFD market. Traders should ensure they choose a broker that holds a license with the FSB or another trusted regulatory body, such as the UK Financial Conduct Authority (FCA) or the Australian Securities and Investments Commission (ASIC).

Is CFD trading in South Africa safe?

CFD trading in South Africa does come with risks. The main concern is around brokers lending traders capital in return for a small deposit, known as margin, allowing traders to increase their position size. Whilst this may mean greater returns, it can seriously increase potential losses.

How much money do I need to trade CFDs?

Although minimum deposits vary between brokers, CFD accounts can be opened with a few thousand South African Rand. Account types vary, but usually the more you deposit, the more competitive the leverage options, fees, and the trading tools available.

What is the best CFD trading platform?

The best CFD trading platform is open to interpretation. MetaTrader (MT4) is the most widely used, but there are other good options. The trick is finding a system that’s reliable, user friendly, and home to all the charts and analysis tools your strategy requires.

Is CFD trading a con?

CFDs are a legitimate financial product. CFD trading brokers and exchanges are regulated by reputable bodies around the world, including the South African Financial Services Board (FSB) and the UK Financial Conduct Authority (FCA).