CFD
trading in the UK and across Europe is increasing in
popularity resulting in a large number of financial institutions
developing trading platforms to offer the product to retail and
professional clients. The increase in the number of CFD brokers has
seen the market become competetive with many brokers now
advertising low commission rates and additional tools to help with
the decision making process.
In addition CFD brokers are making the markets more accessible
to the retail investor with many now providing real time prices at
low or even zero cost (provding you are willing to place a certain
number of trades each month).
However not all CFD brokers are offering the same service. Some
will offer a market maker service where the CFD broker makes the
price and takes all orders onto their own book. In these
circumstances the trader may find that the price being offered by
the market maker differs slightly from the actual market price.
However it is unlikely the price will be too far away as this would
create opportunities for 'arbitrageurs' who would trade with both
the exchange and the market maker at prices guaranteeing a
profit.
Other CFD brokers will offer what is known as Direct Market
Access (DMA) which allows traders to place their orders directly
into the exchange and to be able to see the order working in the
market alongside the hundreds of other orders that are being worked
by traders around the world. There are some traders who prefer to
trade in this way as they feel that to view other orders in the
market offers a better 'feel' for the short term direction of the
market and in some circumstances can assist with the placing of
both stop losses and limit orders. Whilst this way of trading
CFD's does remove any possible conflict of interest with the
CFD broker (your trades are going straight onto the exchange, not
onto the CFD brokers book, it should be noted that it is
likely to be more expensive as the CFD broker will often require
you to pay towards exchange fees and to view the order
book.
Opening a CFD trading account is relatively straightforward with
many companies offering an online application process. Below is a
table of CFD brokers with a few key account opening criteria that
we believe should be considered when you
are deciding which broker to open an account with. It's
not always about price; finding a broker that suits your style of
trading and your technical requirements is as, if not more,
important than shaving a few pence off of your dealing costs.
| Broker | Minimum Account Opening Balance | Commission Rates (UK Shares) | Broker Features | Apply |
 | £150 | £10 | - News
- Mobile Trading
- Demo Account
- Charting
- Research
- Account Opening Online
- Market Maker Trading
- Execution Service
- API/FIX Connectivity
| Applyfor accountDemothe platforms |
 | £1000 | £10 | - News
- Demo Account
- Charting
- Account Opening Online
- DMA Trading
- Execution Service
- API/FIX Connectivity
| Applyfor accountDemo unavailable |
 | £0 | £10 | - News
- Mobile Trading
- Demo Account
- Charting
- Research
- Account Opening Online
- Account Opening Download
- DMA Trading
- Market Maker Trading
- Execution Service
- API/FIX Connectivity
| Applyfor accountDemo unavailable |