CFD Brokers Australia 2020 – Top Rated (and Safe) CFD Platforms

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CFD Brokers Australia

CFD trading is a way to make money trading online. Those who do engage in this type of asset trading, may require minimal technical knowledge about how trades work.

If you are interested in CFD trading from Australia, below is information on how you can get started.

Best CFD Brokers Australia

We’ve checked all brokers that offer CFD trading and which are open to Australian traders.

Here are the top3 CFD Brokers in Australia:

1. HighLow

HighLow is an acclaimed binary options CFD broker based in Australia. It’s one of the few brokers to hold an AFSL.

HighLow offers a number of perks to traders. Mainly, they have a highly user-friendly trading platform available in multiple languages. The broker allows users to try a demo before opening a live trade. This is highly advantageous to CFD traders that are just starting out. Highlow still offers binary options trading (Is it safe?, Is it legal?).

The broker offers a number of options to traders as well. Naturally, high-low options are available. In addition, you will benefit from range, short-term, and on-demand trading options. For more information, read our highlow review.

You can start a trade with HighLow for as cheap as $10. Their maximum trade price is capped at $2,000, which is not ideal for high flying traders.

  • ASIC licensed trader
  • Excellent trading platform software
  • Demo available
  • Low starting trades

2. eToro

eToro is a well-known trading platform based in Australia. The company offers its services to Australians through a licensed entity in Australia. The platform is most popular in Europe, but Aussies can trade in local currency without an issue.

eToro Australia offers a number of trading options, but it has recently become popular as a CFD broker. Placing trades is very convenient through their software. The platform enables social trading. Users can copy trades of other investors or start thematic investing.

Another advantage is that eToro’s trading fees are low compared to other brokers. However, the fees for non-trading features are high.

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  • Popular CFD broker
  • Superior trading platform
  • Social trading allowed
  • Low trading fees

3. Plus500

Plus500 is another Israel-based broker that specialises in CFD trades. The company has a subsidiary in Australia that is locally regulated. The company lists itself on the stock exchange and has annual financial disclosure statements. So you can be assured that the broker is safe to use.

This broker offers a very popular trading platform with many user-friendly features. One major positive is mobile trading, which is seamless with Plus500.

Like HighLow, Plus500 does offer a demo. This way, you can try out new strategies. This broker might be best suited for CFD traders with some experience or new traders.

  • Mobile trading possible
  • Popular trading platform
  • Stock Exchange-listed
  • Issues financial disclosures

VISIT PLUS500 CFD Service. Your capital is at risk

What is CFD Trading?

CFD stands for Contract for Difference trades. It’s unique in the sense that investors are not trading an actual asset. Users make money by leveraging the price margin of a stock or share market instrument. Essentially, a CFD trade allows investors to profit from price changes of an asset like stock, futures, crude oil, or even gold.

Investors don’t actually own the asset to make a CFD trade. For example, if you want to place a CFD trade on gold, you don’t own the gold. The actual value of the asset doesn’t need to be considered either.

CFD trades are speculative and are leveraged. Users can turn a profit if they correctly speculate the rise or fall of a financial instrument within a certain period. You can purchase these trades with a small amount of money. In other words, you don’t have to pay the full price of asset speculation. For example, if you want to make a $100,000 CFD trade, you will be able to pay a leveraged price of 100:1, or something similar depending on the broker. This is one of the many advantages of CFD trading.

CFD trading is highly advantageous to small-time Australian investors because users don’t need to outright own an asset. Also, you will receive a fairly large market exposure for a small amount of money. It’s not without its risks either. The speculative nature of the trade means you can lose a lot of money with just a small movement in the market forces.

How to Choose an Australian CFD Broker

Australian investors make CFD traders through a broker. You could use a traditional market broker or hire a broker that specialises in CFD exchanges. As CFDs have become quite popular in Australia, you will find many from the latter category vying for attention.

Above all, check if the broker is Australian Securities and Investments Commission (ASIC) approved. If so, that is a sign that you are about to benefit from legitimate and highly legal practices. It’s highly recommended to work only with brokers who have an Australian Financial Services Licence (AFSL).

The determining factor for choosing a broker for many investors is the commission. Brokers charge commissions as a percentage of the overall trade. Some brokers only charge for stock CFDs, but it’s best to ask for which trades the commissions apply.

CFD Brokers Australia – Fees and Commissions

The commission rate varies between brokers. However, make sure that you are not paying for a commission that is higher than usual.

It’s common for traditional brokers to charge about a 5% commission rate.

In Australia, brokerage charges depending on ASX stocks. Therefore, make sure of what the typical charging rates are before you hire a broker.

Other than the commission, you might want to consider the type of currencies the broker is using. If a trade goes south, some may offer rebates and alternatives investors can benefit from. Don’t forget to check out the broker’s software, as it needs to be easy to use. The trading platform itself must offer all the features you need.

Before starting a CFD trade, educate yourself on the intricacies and technicalities of this type of exchange. Always choose a licensed broker. You may have an advantage by choosing an Australian broker over those based in other countries.

CFD Brokers Australia 2020 – Top Rated (and Safe) CFD Platforms

If you are on the hunt for the best CFD broker in Australia, then you have come to the right place.

The CFD trading industry has evolved significantly in recent years, with a large array of CFD brokers flooding the Australian market. With so many options, this has made choosing a CFD broker a very confusing experience. But we are here to help with our independent broker reviews and trading guides.

Who should you trade with?

Always trade with a CFD broker that offers fair & transparent trading costs, has an easy-to-use trading platform, offers a wide range of markets, is ASIC-Regulated, segregates client funds and has stringent client security. Check out our “How to find the best CFD broker – four considerations” guide below.

Compare some of the leading, ASIC-regulated CFD brokers;

Best CFD

Brokers

Who are they?

Leverage (Australia)

Regulation

Min. Deposit

Segregated Bank Accounts?

ASX Stock Comm. $

ASX 200 spread

AUD/USD spread

Spread Type

Welcome Bonus?

Trading Platform

Next Steps

Plus500

AU’s fastest-growing and

cheapest CFD broker

City Index

World-Leading CFD

B roker, T ight Spreads

TradeDirect365

Australia’s Best-Value

CFD Broker

How to find the best CFD broker – top 4 considerations;

We’re often asked who we believe the best CFD broker in Australia is and the best answer we can give is that finding your ideal CFD broker is a very personal decision so there really isn’t a right or wrong answer. We all have different tastes! Please conduct your own research and decide which features are most important to you – some of these are listed below;

(1) Spread, commission & other trading costs

Every CFD broker will charge you to make trades on their platform – that is a given. The important thing is to find out what they charge for and how much they charge. Always trade with a broker that is upfront and transparent about their trading costs. Here are some typical trading costs;

  • Spread: the spread is the difference between the buy and sell price, and this is the most normal trading cost. Ask a broker how wide their spreads are as the tighter the spread, the less they are charging you to trade. Also ask if their spreads are fixed or variable .
  • Commission: most CFD brokers will only charge commission on stock trades but it’s always best to ask before you start trading.
  • Overnight financing: do they charge to keep a trade open overnight? And if so, how much will it cost you?

(2) Regulation

Trading with a regulated CFD broker is essential – please do not trade with a broker who is unregulated or your money will be at risk.

Trading CFDs with a regulated broker has many benefits, including that the regulated broker will be closely monitored by the regions’ governing regulator (i.e. ASIC) and will need to operate in accordance with local laws and regulations.

(3) Trading Platform & Trading App

There are a wide variety of CFD trading platforms to choose from so its best that you open a number of demo trading accounts to see what’s out there before you commit to one broker’s platform.

You need to be comfortable with the trading platform that a broker has to offer so please ensure you find the technology (including the mobile app) easy-to-use and uncomplicated, that trades are executed quickly and that you are comfortable with the look & feel of the trading system. If you’re not comfortable, you need to look elsewhere!

(4) Range of Markets

You’ll have a good idea of which markets you want to trade and so the next step is to ensure that your broker of choice actually lists those instruments on their trading platform, otherwise they’ll be no good to you. Some CFD brokers offer over 30,000 individual markets, while others focus on a select few – do your research before you commit to one broker.

Who is the best CFD broker in Australia?

Unfortunately, there is no clear-cut answer to this question. Every CFD broker is different in terms of what they offer – different spreads, leverages, trading platforms, commissions, customer service…. You name it, they’ll all differ!

Therefore, there is no single CFD broker of CFD account that would meet every trader’s individual needs. Instead, you have to consider what is important to you as a trader – is it low cost trading, is it a broker with the best charts, is it DMA trading or do you prefer a market maker, do you need a broker with high leverage? All these questions (plus many others) will help guide you in your decision making.

The cheapest CFD broker;

TradeDirect365 is probably Australia’s best-value CFD broker, offering excellent value through low, fixed, 24/5 spreads, low (or no) commission and generous leverage. If you want a broker that doesn’t charge a lot to trade, then TD365 are a great option. Read Review >

Best ‘All-Round‘ CFD broker;

We think City Index ticks the most boxes across the board. TD365 might be the cheapest CFD broker, but City Index have far superior trading technology, better charting packages, have over 30 years’ experience in the CFD industry and offer a very good, all-round CFD package to client’s. Read Review >

Best CFD broker for high leverage;

Pepperstone also has a very solid CFD offering; reasonably-priced spread & commission costs, excellent customer support, top-notch technology, a range of trading platforms to choose from and high leverage of 500:1 (you will need to request this). If you need your broker to have high leverage, than Pepperstone is the broker for you. Read Review >

What is CFD trading?

CFD trading is a form of leveraged trading that allows investors to speculate on the price movement of a financial instrument, such as a stock, FX, gold, indices, crude oil – the list goes on. With CFD trading, you can take a position on the rising or falling of a financial market. If you speculate correctly, you should make a profit. It’s important to remember a couple of things;

CFDs are a leveraged trading product

CFDs are a leveraged product which means you only have to put down a small amount of money in order to gain significant market exposure. Look at it like a mortgage on a house; you’ve stumped up a $100,000 deposit and the bank has lent you an additional $500,000 to buy the house. The same applies here except on a far greater scale – some CFD providers offer 500:1 leverage!

The risks

CFD trading comes with many benefits but also severe risks. Using leverage means you only need to deposit a small amount of money onto your CFD trading account in order to gain a large exposure to the financial markets. This can result in significant profits or losses with even just a small movement in the market. Therefore, you need to seriously consider and understand the risks involved at all times. Proceed with care as you can lose more than your initial deposit if the market turns against you.

You do not own the physical asset

When CFD trading, you are speculating on the rise or fall of a financial instrument, not physically trading the underlying market (this means you do not own any assets, you are purely taking a position on the rise and fall of a market).

What are some of the benefits of CFD trading?

Profit in both rising and falling markets : With CFD trading, you are simply speculating on the price movement of an asset without actually owning the underlying asset. Therefore you can speculate that the asset will decrease in value as well as bet that its price will rise. In other words, profitable CFD trades can be achieved in a rising market by buying (“going long”), or in a falling market, by selling (“going short”).

Leverage : allows CFD traders to trade the financial markets using funds that represent a small fraction of the trades’ actual value. This can help magnify your potential profits; however it is important to understand that trading with leverage can also be a very serious risk if the trade goes bad.

Access to global markets: One of the key ingredients to successful investing or trading is diversification, and CFD trading gives you just that. Most CFD brokers will give you access to all the world’s markets, including international stocks, currencies and commodities – all without having to leave your bedroom.

Ownership (or lack of): As you are simply speculating on the world’s financial markets and not actually purchasing the physical asset, you don’t have to worry about ownership costs etc.

What are some of the risks of CFD trading?

Trading CFDs is a high-risk investment strategy: trading on margin means your potential profits can be magnified very quickly, but equally, your losses can be magnified just as quick. CFD trading requires a certain level of experience and may not be suitable for all investors.

Volatility: market volatility can be ruthless and your account can be wiped out in seconds. Gapping is a real risk here too. Gapping occurs when the price of a particular financial asset shifts suddenly from one price to another as a result of market volatility. You might not be ‘stopped out’ at the level you requested (via a stop-loss order). Instead, you may be executed at an unfavourable price, which may magnify your losses.

How does CFD trading work?

When you trade CFDs you are not actually buying the underlying asset; instead you are speculating on whether the price of an asset is going to rise or fall. If you believe the price of an asset such as a stock, index, currency or commodity is going to increase, then you would enter a “buy” position, or “go long”. If you believe the price of the asset will decrease then you would enter a “sell” position, or “go short”.

Here’s an example;

  • The ASX 200 is currently trading at 5,600. Your broker is offering a price of 5,599 (sell) – 5,601 (buy). There is a 2 point spread (the difference between 5,599 and 5,601).
  • You believe that the ASX 200 price will improve throughout the day. You decide to BUY one contract of the ASX 200 at 5,601. Four hours later the price has moved to 5,638 and you decide it’s time to exit the trade.
  • You close at 5,638 – a difference of 37 points from where you opened the trade. 37pts x $10 per point equals a $370 profit for you.

Why do people start CFD trading?

There are typically 5 main reasons why people trade CFDs;

1. Take advantage (profit) of price movements (both long and short) on FX, Indices, Commodities, Stocks, Commodities and Cryptocurrencies

2. Leverage. When you trade CFDs, you get access to leverage which means you only need a small outlay to trade

3. To hedge against an existing portfolio. Some traders will use CFDs as a risk management tool against an existing stock portfolio

4. Access global markets – all from one CFD trading account

5. Short selling. CFD trading allows traders to ‘short the market’. That is, rather than BUY in the hope a market rises in value, a trader can go SHORT and sell the financial instrument.

How do you open a CFD trading account?

Applying for a CFD account usually only takes 5-10 minutes. It is a fairly simple process, although you may be required to provide further ID documents in some cases. Once you’ve found your ideal CFD broker, you’re good to go. Simply go to the CFD provider’s website and click on ‘OPEN LIVE ACCOUNT’ to start the process. You’ll generally need to provide the following details;

  • Name, contact details (phone + email) and address
  • Financial details
  • Your trading experience
  • Client qualification questions
  • Declaration

FXDailyReport.Com

Getting started right is very important for achieving success in forex trading. With this in mind, we have compiled a few aspects which you must keep in mind when choosing the best online CFD brokers in Australia regulated by the Australia Securities and Investments Commission (ASIC). The five key points that you should look into before signing up with a broker are:

#1: Is it easy to use the broker’s platform software?

Nothing can be worse than you trying to find your way around on the website of the broker. Therefore, it is a good idea to open a free demo account and check out as to how easy or difficult it is to open a chart, place trades, amend orders and view news updates. You do not have to waste a lot of time in understanding the software. You can ask the CFD broker you are planning to work with if they provide some basic tutorials on how to use the software.

Most CFD brokers provide both the MetaTrader 4 and cTrader platforms. MetaTrader 4 (MT4) is the most popular and most widely used platform. cTrader, provided by Spotware, is also very good and comes with many built-in features. Initially, cTrader was used as a forex trading platform. However, some brokers have started providing CFDs on indices and other instruments on this platform.

Top Australian CFD Trading Brokers Regulated by ASIC

Broker Info Bonus Open Account
Min Deposit: $5
Spread: From 0 Pips
Leverage: 500:1
Regulation: ASIC, CySEC, FCA (UK), IFSC Belize
“50% +20% deposit bonus up to $5,000, Loyalty Program Bonus Visit Broker
Min Deposit: $50
Spread: Starting 0 Pips
Leverage: up to 400:1
Regulation: FCA UK, NFA, CFTC, ASIC, IIROC, FSA, CIMA
Visit Broker
Min Deposit: $200
Spread: Starting 0 Pips
Leverage: 500:1
Regulation: ASIC Australia, FCA UK
Visit Broker
Min Deposit: $100
Spread: Starting 0 Pips
Leverage: up to 500:1
Regulation: FCA UK, ASIC Australia, MAS Singapore
Visit Broker
Min Deposit: $250
Spread: as low as 0.1 pips
Leverage: up to 400:1
Regulation: ASIC Australia and FCA UK
Visit Broker
Min Deposit: €100
Spread: The Spread can be as low as 0.01%” (0.01% = spread for EUR/USD)
Leverage: 1:294
Regulation: ASIC, CySEC, FCA (UK)
Visit Broker
Min Deposit: $100
Spread: Starting From 0.9 pips
Leverage: 400:1
Regulation: MIFID, FSB & ASIC
Visit Broker

#2: What features are available on the broker’s trading platform?

Depending on your needs:

  • Check whether advanced charting features available; if you are just looking for a broker to place orders quickly, this feature may not be essential.
  • Look for a broker that enables advanced order placement feature; if you are looking to place only standard orders, then look out for one that offers competitive pricing
  • Find out whether the broker will provide you with the daily market analysis prepared by a team of experts
  • Ask the broker if they would provide you with notifications when certain price levels are reached either through email or SMS
  • Find out if the broker will provide a free Android and iPhone app so that you can trade on the go

#3: What commissions does the broker charge?

When evaluating the best online CFD trading brokers in Australia regulated by ASIC, you need to keep in mind the fact that the commissions are not the end of everything. The fixed cost that all brokers charge is brokerage. It is not a good idea to pay too much on brokerage. Therefore, you must check out the CFD brokerage rates of brokers under consideration.

When it comes to forex, index and commodity trades, you must make sure that the spreads they offer are tight. Further, you must find out if any other costs are involved. When evaluating CFD brokers, you must ask about the following charges:

Commission charges
CFD financing rates
Software fees (IRESS or other platform fees)
Accessing relevant exchanges (for example, ASX data)

#4: What range of markets does the broker offer?

This is a very important consideration. Market Makers offer nearly all of the world markets from the one account. They include forex, indices, commodities and shares. On the other hand, Direct Market Access (DMA) brokers generally focus on the local exchange. Therefore, the costs involved in trading international markets may be quite high.

#5: How reputed is the broker and what security features do they offer?

Reputation and security are key factors to be taken into account when evaluating the best online CFD brokers in Australia. Some of the questions to be asked are:

Is the brokerage a publicly listed company?
How long has the brokerage been in business?
What do other traders say about the broker on online review websites?

Choose to work with only those that have a good reputation and are financially sound.

In conclusion, choosing trusted CFDs trading broker involves testing their trading platforms and ensuring that you feel comfortable working with them.

Having discussed as to how you can choose the best online CFD broker in Australia regulated by ASIC, here are a few recommended by us for further investigation at your end:

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