Find the most trusted and reliable CFD trading sites here at CFDCompare.co.uk where you will be able to make an informed decision thanks to our highly informative and in-depth analysis of each one from our team of experts who have considerable experience in the industry.

It is our strict policy to only provide information about financial trading sites which are regulated and approved by the FCA (Financial Conduct Authority) and as a result, this has helped us to gain a revered reputation in the marketplace and with our audience.

Each review that we provide for you follows a careful, methodical process to ensure that we bring you detailed and above all, balanced information about each financial trading site that we recommend. We understand that every trader has their own preferences and tastes, which is why we really drill down into the detail about what each site does and offers.

In addition, our news portal provides our loyal readers with all of the latest financial and business news around the world, the implications that these could have on the markets, as well as tips to help ensure that you get the absolute maximum from your financial trading experience.

There are many different elements to consider when it comes to CFD trading and we have gone into detail about these below. For those still wondering what it is though, don’t worry, we have got you covered.

What is CFD Trading?

Essentially CFD trading is using an initial investment and applying a significant amount of leverage, and using this to trade on either a stock market, the foreign exchange market (FOREX), or the commodities market. Therefore, they are a versatile product, due offering more than one index to trade on. Because a customer’s loss can often exceed the sum that they invest, brokers insist that people who are new to the market, practice with demo accounts first, and take video tutorials until they fully understand the product.  CFD stands for ‘contract for difference’, which simply highlights an agreement between the customer and the broker that both parties respect the obligations of the trade.

Why are CFDs so popular?

CFD trading can of course be very lucrative, though to avoid losing big, there is an allowance for customers to apply a ‘stop loss order’ in each trade they make. This basically means customers can apply a cut-off point, to prevent losing more than they are comfortable with, When the trade hits that level, it just shuts down, therefore protecting the customer.

What is a CFD trading platform?

It is thanks to the widespread availability and accessibility of a CFD trading platform, that the general public have the remarkable opportunity to trade contracts for differences, whatever their intentions, or eventual goals. Everyone who accesses and signs up to a CFD trading platform does so for a whole plethora of reasons and motivations. A CFD trading platform is advantageous for a market maker, as it provides them with a much wider audience to create a market in one of the biggest and most commoditized financial products in the slowly recovering economic system. A market maker or liquidity provider, is a company such as a hedge fund, or investment bank, or an individual who quotes a price for a buy and sell trade.

How does this benefit you though? Well, because the use of a CFD trading platform is now so extensive, supply far outweighs demand, which means it is far likely that a market maker can set better value buy and sell quotes, for you the online customer, who wants to make a steady, and much less riskier income. A CFD trading platform also gives access to a new prospective niche in the financial world. Interest rate trading is more advisable to people who understand what affects an interest rate, and with carefully packaged CFD’s this can be leveraged to the max by independent traders who really understand. 

By preempting a natural disaster for example, which affects currency prices and therefore interest rates, traders can utilise a CFD trading platform in order to make a carefully considered prediction. Some people, would for example analyse weather charts and look at past trends and variables to accurately guess when a natural disaster might occur and where, so that interest rates might be affected. With more access to a CFD trading platform, market makers can albeit indirectly affect interest rate trading.

CFD vs Stock

One of the most common misconceptions about CFD trading is that it is the same as stock trading.