Finding an excellent CFD broker in the UK is not a daunting task, although there can be legislative challenges if you are a UK resident. Most of the best forex brokers in the world have a physical presence in the UK, and many of these companies actively support the trading of CFDs. We have provided a list of the best ones and some helpful hints that can guide your process. You will need to know how to open an account, what things to consider when choosing a broker, and, more importantly, how to compare brokers against one another. This page is here to help you feel confident in selecting a CFD broker in the UK.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
78.8% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
RISK WARNING: Derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. A high percentage of retail investor accounts lose money when trading derivatives with this provider. You should consider whether you understand how derivatives work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high degree of risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can result in losses larger than your initial stake or deposit.
A CFD broker wagers with you on the speculation of the price direction of your chosen asset in the future without you having to purchase the underlying asset. The FCA currently bans CFD trading for retail clients in the UK, but if you can verify a residence outside of the UK in a jurisdiction that does not prohibit CFD trading, our list can help you.
The FCA has not lifted its ban on retail trading of CFDs in the UK and has blocked foreign-based CFD brokers from soliciting UK residents. Professional traders are the exception to this rule, and to qualify, you must have one year of relevant experience in the industry and have traded heavily in the past year. Check with a broker for qualifying rules.
During your UK CFD broker review, the broker will ask you to open an account on its website. When you initiate the process, you will need to submit ID information to verify your identity and address of residency to comply with international law. Approval can come quickly, or, if there is a problem, no more than one to three days is the norm.
Choosing the most reliable CFD broker to enable your trading of CFDs is not a decision to be rushed, but it can be accomplished in a step-by-step manner like any other decision. First, learn as much as you can about the industry. You will come across the names of brokers in your search, but our list above will save you a lot of time. The next steps are:
The two primary CFD trading fees in the UK are commission charges and spreads. Forex and commodities may be commission-free, but you might pay a 0.10% commission on a stock CFD at purchase and close. For a EUR/USD forex pair, a tight spread would be below 0.80 pips. If you hold a leveraged CFD without an expiry date open overnight, interest charges may also apply. Deposits tend to be free, but withdrawals may have a fee to cover banking costs. Our comparison tools can also help you in this area.
How do become a CFD broker in the UK?
To become a CFD broker in the UK, you must first be vetted by the FCA and then qualify for a licence. Industry experience, professional credentials and financial backing are critical factors in this process. You will need capital to fund your start-up, a reliable trading platform, a professional website, and a host of banking and liquidity providers in the background. Safety and security are also significant issues, and the system must be thoroughly tested before going live.
Do CFD brokers lose money?
FCA regulations require that all CFD brokers post a risk disclaimer on their websites about the number of CFD traders who lose money. These casualty rates vary by broker but can easily range from 60% to 80% and even higher for beginners. The broker, however, loses money on the remainder of the trades and covers these losses with funds from the client losing trades.
How does a CFD broker work?
CFDs are a wager between the trader and their broker. Aside from the fee and spread revenue, CFD brokers must carefully manage their liabilities for long and short trades by their clients. The broker will hedge its exposures in the market from time to time to lock in its paper gains. If the hedging process is effective, the broker will have funds from client trading losses to pay the 10% to 40% of winning trades from its customers.
