Contract for differences or CFD trading is a popular form of investment in financial derivatives that allows you to trade an asset without actually buying or selling it. At GetFirstStep, we provide up-to-the-minute analytics of Australian CFD trading market and encourage beginning traders to educate themselves before making any deposits. If you are ready to start investing – do it with one of the most trusted brokers in Australia.
- Invest With the Best CFD Trading Platform Australia
- How to Choose your broker?
- Beginner’s Choice
Contract for Differences Trading in Australia
In Australia, there are a lot of CFD brokers with different approaches to providing minimum deposit, low spread and high leverage options. These brokers operate on different trading platforms and software providers.
Trading CFDs in Australia is legal as long as you trade with a licensed broker. Let’s find out more about the best brokers and how a CFD trader makes a profit or a loss as the price of an asset is changed.
What is CFD Trading?
CFD stands for “contact for difference” and it is a financial derivative or an instrument that you can buy or sell. Other examples of a financial derivative would include futures or options. Hence to explain the meaning of CFD we need to define a “financial derivative”. A financial derivative is a contract or a mutual obligation on a certain action in regard to a certain traded asset. The asset in its turn can be anything that is traded on global financial markets: shares, bonds, commodities, government obligations and even other derivatives. Therefore, to define CFD we need to break it down to the action and to the asset. Usually, CFD is explained as a call for a rising or a falling price of a stock market share and as the result a CFD trader makes or loses money depending whether he made the right call.
Basically, CFDs are bets on the prediction on the rise or on the fall of a chosen share (or of an another asset). If the price of a share goes as predicted – welcome to the winners’ club! Find out more about how CFD trading works and how is it different from trading other financial assets.
- How Does CFD Trading Work?
- CFD Trading Vs Shares Trading
- CFD Trading Vs Options Trading
- CFD Trading Vs Futures Trading
Best CFD Trading Platform Australia
We constantly monitor the CFD trading market to provide you with the list of all CFD brokers available to Australians. We evaluate Australian trading platforms based on things like number and variety of trading instruments, available brokerage services and customer feedback. Then we move these cfd providers up and down the list according to our findings and the rating system that we let them go through. Below please find our latest list of best CFD trading platforms with short brand descriptions for your convenience.
IC Markets“IC Markets” is a world leader when it comes to the variety and number of financial markets you can trade. Over 500 thousand trades are made daily with “IC Markets” with over 230 financial instruments. It is a strong, reliable and a very well-known brand in Australia and it wouldn’t be at top 1 position on our list otherwise. “IC Markets” is the best option for both those looking for “all-in-one-place” to trade and those looking for a top CFD broker.
Platforms: cTrader desktop, cTrader web, Mirror Trader, ZuluTrade, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web | Regulations: ASIC, CYSEC, Offshore | Minimum Deposit: 0
Pepperstone“Pepperstone” holds completive advantages over other brands by holding a “Best Forex ECN Broker” award issued by the UK Forex Awards in 2018. Apart from a smaller number of trading financial instruments there isn’t any reason why it wouldn’t be on the top of our list. “Pepperstone” provides a high-quality CFD brokering service in Australia and gets best reviews in Australian trading community.
Platforms: cTrader desktop, cTrader web, ZuluTrade, MT4 Dekstop, MT4 Web, MT5 Desktop, MT5 Web, MAC Platforms | Regulations: FCA, MIFID-ESMA, ASIC, DFSA, CYSEC, Offshore | Minimum Deposit: 0
Plus500“Plus500” is what comes to mind when we think of #1 CFD broker in the world. A primary sponsor of the Brumbies Rugby team, “Plus500” is available on any device in almost any country, including Australia. This brand claims to have the most convenient trading app which can definitely be considered very popular among Australian CFD traders. “Plus500” is a great all-around choice as a trading platform.
Platforms: Proprietary Web Platform | Regulations: MAS, FCA, MIFID-ESMA, ASIC, FMA, CYSEC, ISA, Offshore | Minimum Deposit: 100
TradeDirect365“Tradedirect365” is a well-known brokerage company that provides is customers with top notch trading services. With “Tradedirect365” you can trade almost any type of financial assets, including CFDs. It also provides a whooping 1:200 leverage to it’s Australian traders.
If you don’t see a broker, you were looking for in the list above then it can be one or all of the following:
- Australia is among the restricted territories where this broker cannot operate;
- We have found this broker to be unreliable and thus it didn’t make it to our list.
We update information in our top CFD brokers list every week based on a detailed market analysis provided to us by our affiliated professional traders. We also keep in touch with all listed CFD brokers to make sure that our clients are prone to all of their promotions, including the latest ones.
How to choose the best broker from a vast ‘ocean’ of all trading platforms in the internet? The best CFD trading broker is the one that is licensed and regulated, its task is to provide you with access to a safe trading experience. A beginner trader should get the best support from a broker including the possibility to create a demo account and access to the CFD knowledge base. The website that offers the best trading services should be compatible with any device and allow mobile trading.
Take a look at the list of the best CFD brokers ranking where each broker meets all the expectations and find out more how CFD brokers operate and how CFD trading works with GetFirstStep!
CFD brokers differ in the following ways:
- Whether they are regulated or not and what license the hold?
- The main strategy of trading they offer their clients (e.g. high leverage or lowest spread brokers)
- The software providers they operate on
- Types of trading accounts they open for their customers
- Amount of Custom Tools and Add-ons they offer
- Availability of demo mode and educational materials they provide
- Mobile trading options they give
- Level of customer service and support they provide to their clients
CFDs occupy a significant segment of the trading market. Every day more than 5 trillion dollars are used in CFD-related transactions. Larger and smaller brokers that work under different regulations readily offer their services to anyone who wishes to benefit from the flourishing trading market. The brokers who want to enter the CFD market can get their licenses in different jurisdictions. The common basis upon which each jurisdiction agrees is that to protect investor’s money, it is highly important to segregate company’s funds from client’s funds. All the other rules and regulations vary from jurisdiction to jurisdiction. The differences lie in the management of clients’ funds, capital requirements, pricing, and leverage. Let’s have a look at these differences in the table below:
|Country||Governed by||№ of Providers||Treatment of Client Money is regulated by||Fair Market Pricing||Client Money Buffer||Leverage|
|Australia||Australian Financial Services (“AFS”) Licence||65||Part 7.8 of the Corporations Act 2001 (Cth).||No||No||N/A|
|Cyprus||Cyprus Securities and Exchange Commission (CySec)||181||Investment Services and Activities and Regulated Markets Law of 2007 (Regulated Markets Law) and Part VI of CySec Directive DI144-2007-01 of 2012 (Directive||Yes||No||The lower limit of 1:50|
|United Kingdom||the Financial Conduct Authority (“FCA”)||104||Client Asset Sourcebook (CASS), specifically CASS 7.13, which is published by the FCA.||Yes||No||N/A|
|United States of America||US Commodities and Futures Trading Commission / a retail foreign exchange dealer (RFED) /a Futures Commission Merchant (FCM)||3||The Commodity Exchange Act and CFTC Regulation 1.20||Yes||Yes||1:50 or 1:20 based on currency|
When choosing the best CFD broker, always check if it is regulated by at least one of the tier-1 regulators mentioned in the table above. It is important because it ensures the security of your funds.
Jurisdictions impose the rules under which the Capital Requirements are regulated. Imposing Capital Requirements is an important factor for ensuring the security of funds being invested by a customer in CFD. If you’d like to find out what capital requirement a broker has, check his regulator. Thus, Capital Regulation is one more reason why you should look for regulated brokers. You can be sure that every broker presented in our best CFD brokers list are all regulated.
Here are the examples of the different capital Requirements:
|Australia||AUD1,000,000 / 10% of average revenue|
|United States||USD20,000,000 + adjustments for liabilities|
Please note that all CFD trading brokers in Australia fall under the NTA requirement according to which they must provide their customers a financial buffer that is aimed at decreasing risks in case of the failure of their businesses.
Commissions And Spreads
Please note that other costs also have to be accounted for when calculating profits or loses and choosing your broker.There are five different types of CFD fees:
- Spread (broker’s commission for making a transaction)
- Commission fees (an additional fee charged on the spread by very few brokers)
- Overnight financing (doesn’t apply if you open and close your position the same day)
- Inactivity fees (applies to inactive funds over long periods of time)
- Withdrawal fees (check withdrawal fees with your bank)
Best CFD trading brokers do not charge any extra commission fees. They earn on the difference between the buying and the selling prices, otherwise known as ‘a spread’. Find out what is the best CFD Broker with the lowest spread in Australia according our team of experts. Let’s now have a look at the examples of spreads that forex CFD brokers refer to:
Fixed spread – when you know the spread before you trade and it doesn’t change.
Floating spread – no fixed amount of spread, it is changing according to the market volatility
Commission fee – as it has been mentioned earlier, not that popular but still, sometimes is used. It is counted as a percentage of a broker’s spread. You will know the amount before you trade.
For a beginner trader it is a good idea to start his/her experience of trading with fixed spread CFDs because in this case he/she won’t have to make complicated calculations.
Individual Perks of CFD Brokers
As well as the overall rating of CFD brokers we have outlined a few Australian brokers based on their strong individual advantages that most traders consider when choosing a broker. Here you can find out more on how CFD brokers operate and how CFDs are traded.
Best CFD brokers by individual perks and trading strategies they offer:
- No minimum deposit
- High leverage
- Lowest Spread
Brokers with No Minimum Deposit
Some Australian CFD brokers require traders to make a minimum deposit to allow trading with real money. If you are a beginner in trading and you want to move on from your demo account to the real fiat account then we recommend you start with small deposits first. No minimum deposit CFD brokers provide traders with opportunity to invest small sums of money into trading. At Getfirststep, we believe such brokers deserve a separate top list.
We are currently reviewing Australian brokers with no minimum deposits to decide which one is the best.
Best High Leverage CFD Broker
CFD brokers with high leverage provide investors with the possibility to earn higher profits than the initial deposit allows. The deposit value is multiplied many times by the funds which an investor borrows from such types of brokers. Therefore, with only a single source of funds bigger positions are opened to a trader. Choose the best CFD broker from the list and earn huge profit from this kind of trade.
Best CFD Broker with the Lowest Spread
If you would like to decrease trading risks then the lowest spread CFD brokers are your choice. Some brokers even offer the spread of 0 pips, e.g. ‘Tradedirect365’. It is really attractive because it means that the cost of difference between the bid and ask price is lower and that you pay very close to the actual market price for a currency pair. Use our CFD broker ranking of the most reliable brokers that offer the lowest spreads on the market.
Trading Platform & Software
The best CFD broker is the one that offers a significant variety of trading platforms to choose from. As to the software providers, the state of things may differ. Some brokers refer to well-known names in the industry of software solutions like MetaQuotes Software. Others develop their software for trading platforms to demonstrate their uniqueness. In any case, brokers should provide the access to the selection of the platforms. The best Forex CFD brokers will offer you to choose between MetaTrader trading platform (MT4 and MT5) and cTrader platform. Choose a broker that offers the trading platform you prefer working on.
Here is the list of 5 most popular and trusted CFD trading platforms in Australia:
- cTrader desktop and web versions
- MT4 dekstop and web verions
- MT5 desktop and web versions
- Proprietary Web Platform (brokers’ own platforms)
To make it more convenient for traders brokers from our lists of the best CFD brokers offer different types of accounts that traders can create according to the number of funds they are ready to invest in CFD:
- Micro Account – the trading account usually recommended for beginners where one trading lot equals 1000 units of the traded instrument.
- Mini Account – involves more risks and more investments. In the case of Mini Account, the size of one trading lot is 10,000 units.
- Standard Account – in the case of this account different brokers may require a different minimum amount of units. The most common is 100,000.
The best CFD broker will also offer to create a demo account for a trader to get hands-on experience before risking his/her funds on trading. If you are a beginner it is highly recommended to start with this account and learn how to trade. Then, you can move on to a micro account and when you are confident enough, try other advanced accounts that a broker offers.
Brokers that score high in our CFD broker ranking will be not only the ones that follow the main requirements but also the brokers that provide some additional features and custom tools to their clients. These features may be presented by but not limited to the following options:
- Risk management instruments (e.g. ailing stops)
- Broad selection of technical indicators
- Charting package with clear conditions
- One-click trading
Thus, when choosing a broker take into account the range of trading instruments it offers. You can read our detailed reviews about brokers that are presented on our best Australian CFD brokers list.
It takes time to become an experienced trader. However, you can reduce the amount of time required with different trading tools provided by the best brokers for CFD trading. First of all, a customer should have the possibility to start trading via a demo account without spending his/her funds. It is the best thing for gaining hands-on experience. What’s more, the information on the broker’s website should be as clear and accessible for understanding as possible. Of course, it would be great to combine the knowledge gained via your broker’s resources with an online course on trading strategies. Getfisrtstep team is also happy to share trading tips and know-hows. The availability of educational information on a broker’s website is as important for a beginner as it is for an experienced trader. Webinars, topic articles, tutorials – look for the training tools when you pick a broker and don’t miss the chance to learn because your income will depend on your skills.
When you are looking for the best CFD broker, check if the broker is accessible via a mobile device. For instance, this can be a web-based app that does not require to be downloaded and installed on your gadget. The site will adjust to it automatically offering you the same features as on the desktop version. CFD brokers ranking high in our reviews usually offer one more variant to their customers – the possibility to install an Android or iPhone-based app. Such apps should offer full functionality, in-app support and provide traders with market analytics and trading tools, like live streaming prices and charts, technical indicators, and other. When we compiled the list of the best brokers, we made sure to include only the ones that can offer the supreme portable trading experience. Always choose a broker that has web-based or Android/iOS-based apps that will adjust to your mobile device.
The main mistake when choosing the best CFD broker is to neglect the importance of a high-quality customer support service. Keep in mind that sooner or later you will need to refer to the customer support team for help. The support must be provided 24/7 via different contact channels like e-mail, live chat, and phone. The customer support agents must be well-trained and knowledgeable to help you with any question or issue that may appear when you trade. It is in your best interests to check how these services work before signing up for a broker. You can always rely on our list of best CFD brokerage companies where we included only those with the highest quality of customer support services.
Which CFD Broker to Choose for A Beginner
It is of high importance for a beginner to open a trading account with an experienced and reputable broker. At the beginning of your trading career, you should have the possibility to research the available markets and select comfortable financial instruments. Best CFD brokers for beginners will provide you with the possibility to try everything before entering the live trading market via a demo account. It means that you won’t have to risk your money while learning the overall CFD trading process.
A little life hack for you: with our ranking of CFD brokers mentioned above, you do not have to look for the best crypto broker if you’d like to enter the cryptocurrency market or the best CFD shares broker in case you are more into shares. The trading websites we included in the review are universal with the big number of markets available via different trading platforms.
CFDs are financial products that offer a great opportunity to earn a considerable profit on various financial markets by taking advantage of volatility. High tolerance for risk is the factor that makes CFDs so attractive for new traders.
With the hundreds of CFD brokers on the Internet, it may seem easy to find the right one. However, if you are looking for a reliable CFD broker with the lowest cost and most attractive conditions, the choice narrows down. Our team tested the services of quite a lot of trading websites and we are ready to offer you the list of the best available options on the market.
CFD Broker FAQs
A Global CFD is the way of trading on a big variety of global markets and is based on the difference between buying and selling costs of assets.
The best CFD platforms are Plus500, XTB, TMGM, Swissquote, FxPro, IC Markets, eToro.
CFD brokers allow you to enter the market with higher investments and pay you the difference between the cost of purchasing and selling assets if you predict the market fluctuations.
Check if a CFD broker is regulated, what kind of accounts you can open with it, the type of trading platforms you can access, and the quality of customer support. The best CFD broker will meet all the requirements.