CFD Trading in Denmark

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Christian Harris
Christian is a seasoned journalist with decades of experience. He transitioned from tech journalism to finance to follow his interest in investing. He has been trading stocks, futures, forex, and cryptocurrencies for more than 5 years, becoming an eToro Popular Investor. With hands-on expertise across various assets, he offers valuable trading insights.
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James Barra
James is an investment writer with a background in financial services. As a former management consultant, he has worked on major operational transformation programmes at prominent European banks. James authors, edits and fact-checks content for a series of investing websites.
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Michael MacKenzie
Michael is a writer and editor with over a decade in journalism and publishing. His niche lies in editing and fact-checking content in the financial services sector, with a focus on online brokers and trading platforms. Michael previously reported on politics and economics in the Middle East and edits books for established publishers.
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Denmark’s thriving economy and high standard of living make it an attractive hub for traders. With over 5.9 million people and a strong innovation and tech culture, more Danes are trading contracts for difference (CFDs).

In this beginner’s guide to CFD trading in Denmark, we explore how the country’s regulations and economy make it an ideal place to deal CFDs, while offering insights into the risks to help you navigate this market.

Quick Introduction

Best CFD Brokers in Denmark

Through extensive tests, we've pinpointed these 4 platforms as the top picks for CFD traders in Denmark:

Click a broker for details
  1. 1
    AvaTrade
    79% of retail accounts lose money with this provider.

    Ratings
    4.8 / 5
    4.3 / 5
    4.5 / 5
    3.8 / 5
    4.3 / 5
    4.3 / 5
    4.3 / 5
    4.5 / 5
    4.3 / 5
    4 / 5

    $100
    0.01 Lots
    1:30 (Retail) 1:400 (Pro)
    ASIC, CySEC, FSCA, ISA, CBI, FSA, FSRA, BVI, ADGM, CIRO, AFM
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting, Futures
    WebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
    Skrill, Wire Transfer, FasaPay, Mastercard, Perfect Money, Swift, MoneyGram, Credit Card, WebMoney, JCB Card, Debit Card, Neteller, Boleto
    USD, EUR, GBP, CAD, AUD
  2. 2
    Deriv.com

    Ratings
    3.5 / 5
    4.5 / 5
    4.5 / 5
    4 / 5
    4 / 5
    4.1 / 5
    3.8 / 5
    3 / 5
    4.2 / 5
    4.5 / 5

    $5
    0.01 Lots
    1:1000
    MFSA, LFSA, VFSC, BFSC
    CFDs, Multipliers, Forex, Stocks, Indices, Commodities
    Deriv Trader, Deriv X, MT5, TradingView
    Neteller, Visa, Skrill, WebMoney, FasaPay, Perfect Money, Diners Club, Banxa, Paytrust, Wire Transfer, Mastercard, Credit Card, JCB Card, Sticpay, Trustly, Volet, Paysafecard, AstroPay, Maestro, Airtm, Boleto, JetonCash, Przelewy24
    USD, EUR, GBP, AUD
  3. 3
    Pepperstone
    CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs.

    Ratings
    4.6 / 5
    4 / 5
    3.8 / 5
    4.4 / 5
    4.4 / 5
    4.6 / 5
    4.3 / 5
    4 / 5
    4.4 / 5
    4.1 / 5

    $0
    0.01 Lots
    1:30 (Retail), 1:500 (Pro)
    FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
    CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
    MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
    Visa, Mastercard, Credit Card, Debit Card, PayPal, Wire Transfer, POLi, UnionPay, BPAY, Neteller, Skrill
    USD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD
  4. 4
    IC Trading

    Ratings
    2.8 / 5
    3.5 / 5
    3 / 5
    4 / 5
    4 / 5
    2.8 / 5
    3 / 5
    2.2 / 5
    4.8 / 5
    4.6 / 5

    $200
    0.01 Lots
    1:500
    FSC
    CFDs, Forex, Stocks, Indices, Commodities, Bonds, Cryptos, Futures
    MT4, MT5, cTrader, AutoChartist, TradingCentral
    PayPal, Neteller, Mastercard, Visa, Wire Transfer, Debit Card, Credit Card
    USD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD

How Does CFD Trading Work?

CFDs differ from traditional assets like stocks and cryptocurrencies because they are derivative products, allowing you to speculate on price movements without owning the underlying asset.

You enter into a contract with a broker to exchange the difference in the price of an underlying asset between the opening and closing of a trade. It’s fast-paced, high-risk and popular with short-term traders.

This dynamic trading method can provide access to a range of Danish, European and global markets, including:

It’s important to remember that CFD trading incurs costs like spreads, commissions, and overnight fees (if you don’t day trade).

These trading fees tend to be higher on less liquid financial instruments like DKK currency pairs, which may impact the profitability of trading strategies.

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Christian Harris
Author

CFD trading is legal in Denmark and is governed by a comprehensive regulatory framework established by the Danish Financial Supervisory Authority (DFSA), ensuring that brokers comply with EU regulations and local laws to protect traders.

As a member of the European Union, Denmark follows guidelines set by the European Securities and Markets Authority (ESMA). These guidelines include:

The DFSA frequently warns investors about the risks associated with CFD trading, emphasizing the potential for significant financial losses, mainly due to high leverage.

They advise you to fully understand the risks before engaging in CFD trading:

Is CFD Trading Taxed In Denmark?

In Denmark, profits from CFD trading are subject to taxation, with different rules applying to casual investors and professional traders.

Non-professional traders are liable to pay 27% on the first DKK 61,000 on the total income from shares and 42% on the shares over DKK 61,000.

Losses can be deducted against capital gains from financial investments like stocks or CFDs.

For professional traders, CFD profits are treated as business income and are subject to higher income tax rates of up to 52%, depending on overall earnings and local tax brackets.

The Danish Tax Agency (Skattestyrelsen) requires accurate reporting of CFD trades, including profits and losses.

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Given the complexity of the tax laws, it’s advisable to seek professional tax advice to ensure compliance.

A CFD Trade In Action

Let’s explore a hypothetical scenario where I day trade healthcare giant Novo Nordisk (NVO), Denmark’s largest company with a market cap of over $500 billion.

I’m using CFDs so I don’t have to buy shares directly and so that I can leverage my potential returns with a small outlay.

Event Background

Novo Nordisk released its quarterly earnings report.

The manufacturer of the weight-loss drug Wegovy and the diabetes medication Ozempic reported a 31% increase in sales when measured in Danish kroner and a 36% increase at constant exchange rates, reaching a total of 232.3 billion kroner ($33.71 billion).

Full-year operating profit surged by 37% in kroner and by 44% at constant exchange rates, reaching 102.6 billion kroner. As a result, Novo Nordisk hit $500 billion in market value, making it Europe’s largest company by market capitalization.

Trade Entry & Exit

Positive earnings reports generally have a bullish impact on a company’s stock price.

I noticed the stock price began to react positively in pre-market trading. By the time the Danish market opened, NVO shares had already gapped up by 2.50%, indicating strong bullish momentum.

I decided to open a long (buy) position as I expected the stock to rise further throughout the trading day.

Technical analysis of Novo Nordisk for a stock CFD trade
Source: Investing.com

After entering a long position, I set a stop-loss order at 2.00% below my entry point to protect against sudden market reversals. I also put a take-profit order at 2.00% above the current price, targeting a quick gain based on the positive sentiment for a 1:1 risk/reward trade.

I monitored the stock during the trading day, watching it steadily climb as more traders bought into the momentum. The stock reached my take-profit target toward the end of the European trading session.

My position automatically closed at this point, locking in a solid profit. The total process from trade entry to exit took around 6 hours. The stock continued to rise throughout the session before closing the day with a 3.50% increase.

Bottom Line

In Denmark, CFD trading is legal and regulated, ensuring a transparent trading environment. As part of the EU, Denmark also adheres to ESMA regulations, which include limits on leverage and negative balance protection to safeguard retail traders from excessive risk.

However, before day trading CFDs, you must choose a regulated broker, be aware of the costs involved – such as spreads and commissions – and ensure you comply with tax obligations on profits.

Risk management, proper education, and regulatory compliance are also essential. And never risk more than you can afford to lose.

To start trading CFDs, visit DayTrading.com’s selection of the top CFD day trading platforms.

Article Sources

The writing and editorial team at DayTrading.com use credible sources to support their work. These include government agencies, white papers, research institutes, and engagement with industry professionals. Content is written free from bias and is fact-checked where appropriate. Learn more about why you can trust DayTrading.com