When you are trading CFD’s fees are not usually measured the same way as when you are trading stocks. CFD trading fees are usually measured in what we call spreads. The spreads is the difference between a buyer and a seller. And when you are trading CFD’s then you pay this spread in trading fees to your online broker.
The spread can vary a lot from markets you trade, to instruments you trade. And the spreads on the instrument also varies a lot from broker to broker. CFD’s are complex financial products that are traded on margin. Trading CFD’s carries a high level of risk since leverage can work both to your advantage and disadvantage. As a result, CFD’s may not be suitable for all investors because you may lose all your invested capital. But if you understand CFD’s and the way to use them then you also need to make sure that you choose the best CFD broker for your preferences.
The market for CFD trading is becoming more popular for every year, this also means that you have a lot of choices when you are choosing your online CFD broker. This should create a lot of competition between the different brokers but the broker market can be difficult for private investors to navigate in. Spreads on different markets vary a lot.
We have made som calculations here that shows the difference in CFD spreads and how these fees add up over a year. Our measurements shows that if you are trading 4 times pr. month and every trade has a value of 5 contracts each time then these small fees adds up over a year. See here how different CFD instruments vary a lot in spread.
The lowest CFD broker spreads:
Dow Jones – 242 € pr. year
DAX – 242 € pr. year
EUR/USD – 121 € pr. year
GBP/USD – 218 € pr. year
Crude Oil – 726 € pr. year
The highest CFD broker spreads:
Dow Jones – 1.452 € pr. year
DAX – 363 € pr. year
EUR/USD – 726 € pr. year
GBP/USD – 726 € pr. year
Crude Oil – 1.210 € pr. year
As our measurements shows comparing online CFD brokers and choosing the best online broker for your preferences is worth the effort. For example if we take the Dow Jones index then there is a big difference in paying 242 € Pr. year or paying 1.452 € Pr. year. Which would you choose?
Compare the best online CFD brokers – Browkers.com