CFD stands for “contract for difference.” It is a financial instrument that allows traders to speculate on the price movements of a wide range of financial assets, including stocks, currencies, commodities, and indices. In the UK, there are a number of brokers that offer CFD trading to retail and professional clients.
A CFD broker is a financial services firm that provides clients with the ability to trade contracts for difference (CFDs). CFDs are financial instruments that allow traders to speculate on the price movements of a wide range of financial assets, including stocks, currencies, commodities, and indices.
CFD brokers typically offer their clients the ability to trade CFDs through an online trading platform, which may be web-based or a downloadable software application. The platform typically provides real-time prices, charts, and other tools to help traders make informed trading decisions.
CFD brokers typically charge a commission or spread on each trade, which is the difference between the bid and ask price of the underlying asset. Some brokers may also charge additional fees, such as overnight financing fees for holding positions overnight or inactivity fees for traders who do not trade frequently.
Some of the top CFD brokers in the UK include:
When choosing a CFD broker, it is important to ensure that the broker is regulated by a reputable authority, such as the FCA in the UK. This will ensure that the broker adheres to strict standards of conduct and financial reporting and provides a high level of protection for traders.
The Financial Conduct Authority (FCA) is a financial regulatory body in the United Kingdom responsible for regulating and supervising financial services firms and financial markets. The FCA was established in 2013 and is an independent public body that operates at arm’s length from the UK government.
The FCA’s primary objectives are to protect consumers, enhance the integrity of the financial system, and promote competition in the interests of consumers. To achieve these objectives, the FCA has a range of powers and duties, including the authority to:
The FCA is funded by fees, and charges levied on the financial firms it regulates.