CFD Trading In South Africa

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James Barra
James is an investment writer with a background in financial services. He has worked as a management consultant, where he delivered large-scale operational transformational programmes at some of Europe's biggest banks. James authors, edits and fact-checks content for a series of investing websites.
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Jemma Grist
Jemma is a writer, editor and fact-checker focused on retail trading and investing. Jemma brings a unique perspective to the forex, stock, and cryptocurrency markets and works across several investment websites as a researcher and broker analyst.
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William Berg
William contributes to several investment websites, leveraging his experience as a consultant for IPOs in the Nordic market and background providing localization for forex trading software. William has worked as a writer and fact-checker for a long row of financial publications.
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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). Here we’ll run through everything you need to know to get started, as well as explaining the tax implications of CFD trading in South Africa.

Best CFD Brokers in South Africa

Our team have tested hundreds of CFD brokers as of July 2024, and these are the best options for South African traders:

Click a broker for details
  1. 1
    AvaTrade
    20% Welcome Bonus up to $10,000

    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
    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
    XM
    $30 No Deposit Bonus When You Register A Real Account

    Ratings
    4.3 / 5
    4.5 / 5
    4.3 / 5
    4.3 / 5
    4 / 5
    4.5 / 5
    4.5 / 5
    4.5 / 5
    4.7 / 5
    3.9 / 5

    $5
    0.01 Lots
    1:1000
    ASIC, CySEC, DFSA, FSC, FSCA, CNMV, AMF
    Forex, Stock CFDs, Turbo Stocks, Indices, Commodities, Precious Metals, Energies, Shares, Crypto, Futures
    MT4, MT5
    Credit Card, Debit Card, Skrill, Neteller, Wire Transfer, Perfect Money, Apple Pay, Google Wallet, TransferWise, Visa, M-Pesa
    USD, EUR, GBP, AUD, JPY, ZAR, CHF, SGD, PLN, HUF
  3. 3
    IC Markets

    Ratings
    4.6 / 5
    4 / 5
    3.5 / 5
    4.6 / 5
    4 / 5
    4.5 / 5
    4 / 5
    3.5 / 5
    3.1 / 5
    4.2 / 5

    $200
    0.01 Lots
    1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global)
    ASIC, CySEC, FSA, CMA
    CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto
    MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade
    PayPal, Skrill, Neteller, Visa, UnionPay, Wire Transfer, Rapid Transfer, Mastercard, POLi, BPAY, Credit Card, Klarna, Swift, SafeCharge
    USD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD
  4. 4
    Deriv.com

    Ratings
    3.5 / 5
    4.5 / 5
    4.5 / 5
    4 / 5
    4 / 5
    4.1 / 5
    2.5 / 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, MT5
    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
    USD, EUR, GBP, AUD

See all CFD Brokers in South Africa

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 Sector Conduct Authority (FSCA) oversees CFD and forex trading. In addition, many established companies 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.

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:

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.

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).