What are the most important CFD fees?

Written by
Fact checked by
Adam N.
Updated
Nov 2023

CFDs are popular instruments to trade; however, trading them is not only highly risky but can also be quite costly. If you want to understand what kind of costs you'll face and find a broker with favorable pricing for your particular CFD trading plans, you've come to the right place.

The main fee types charged by brokers for trading CFDs are spreads, commissions and financing rates (also known as overnight fees). Of these, spreads are charged on virtually every CFD trade and therefore the most important cost item. Commissions are charged by only a few brokers; whereas financing rates apply only in certain situations.

In the following chapters, we'll also let you browse some of the world's top brokers to see what their general CFD fee levels are or what they charge for trading a specific asset.

How do we know all this? First, we regularly collect CFD fee data from dozens of brokers. But more importantly, most of our analysts trade on a daily basis, and have used their experience to develop a robust methodology to judge brokers' CFD trading cost levels beyond simply looking at spreads.

If you're short on time or don't have specific brokers in mind, check out our list of the best CFD brokers in 2024. This ranking incorporates not only trading costs but also the general quality of the broker's services and trading platform. It is based on an in-depth review and live-testing of more than 100 brokers by our analyst team.

THE ESSENCE:

  • CFDs are versatile but risky assets that let you bet on price movements of an underlying asset such as a stock
  • The spread between the bid (sell) and ask (buy) price of a CFD is a key cost item to watch
  • Some brokers also charge a flat commission; while you must pay a financing rate when keeping positions longer
  • CFD trading fees at various brokers can differ widely - check and compare them using our tools

What is CFD?

CFD, or Contract for Difference, is a type of trading instrument that allows you to speculate on the price movements of an underlying asset without actually owning it. The underlying asset can be more or less any tradable asset, such as a stock, a stock index, an ETF (exchange-traded fund), a bond, a commodity or a foreign currency.

When trading a CFD, you basically enter a contract with your broker, betting on whether the price of the underlying asset will rise or fall. If the price moves in your favor (either up or down), you will make a profit; if it moves against you, you will take a loss.

One of the most important defining features of CFD trading is leverage; that is, making a larger bet than you could otherwise afford with just the money you deposited. This can amplify your gains; for example, with 20:1 leverage on a stock CFD trade, you can reap the gain on 20 stocks while putting down the price of just one stock.

However, leverage can also magnify your losses. In the same example, if the price moves in the opposite direction, you would take the combined loss on 20 stocks, even though you only invested the price of one stock. This is what makes CFD trading so risky: a loss of just a few percent in the underlying asset can easily wipe out your entire investment into that particular trade.

If you want to learn more about the advantages, downsides and practicalities of CFDs, read our detailed guide to CFD trading.

The risks of CFD trading should not be taken lightly. Check out our introduction to the importance of risk management in CFD trading, including some practical tips.

What costs are involved in CFD trading?

As with any other asset, youll face two cost categories when trading CFDs at an online broker: trading fees and non-trading fees. Of these, trading fees - spreads, commissions and financing rates - will make up the bulk of your expenses; while non-trading fees will affect you a lot less, if at all.

Types of trading fees

  • The spread is the difference between the bid (sell) and the ask (buy) price. It is usually expressed in pips; a pip is the smallest increment by which the price of an asset can move. Brokers set spreads at their own discretion, taking into account market liquidity and the price volatility of the asset.
  • Some brokers also charge a commission for each trade - this can be a flat fee (such as $1), a percentage of the value of your trade, or a combination of these. Brokers who charge a commission often quote a smaller spread.
  • An overnight fee (also expressed as the financing rate) must be paid if you hold your position for more than one day - or more precisely, when your CFD position is open past a specific daily cutoff time.

CFD trading fees can vary greatly from broker to broker and from one asset to another. Total fees for trading a specific CFD can be 5-10 times higher at one broker compared to another. Similarly, trading one type of CFD (such as a specific stock CFD) at a broker can cost 5-10 times as much as trading another type of CFD (such as a stock index CFD) at the same broker.

Types of non-trading fees

Non-trading fees are less relevant for CFD traders but nonetheless worth keeping in mind.

  • Withdrawal fees are charged when you transfer money out of your brokerage account, e.g. if you want to access your trading profits. Most brokers no longer charge a withdrawal fee, although some limitations may apply.
  • An inactivity fee is charged if you don't use your account for an extended period (typically one year). This rarely happens to most CFD traders, who often trade daily. Still, remember any dormant broker accounts you have to avoid being charged.

CFD trading fees at top brokerages

CFD fees

Now that you know all about CFD fees, you must be eager to find out what you can expect to pay on a typical CFD trade at some of the world's best-known brokers.

Click below to read our general assessment whether CFD fees are high or low at the broker of your choice, and to see broker-specific fee calculations for some popular CFD assets. We also included a fee calculation example to show you what these costs mean for you in practice.

Apple CFD fees

Tech giant Apple is one of the most popular stock CFDs to trade, as it is a highly liquid instrument (meaning relatively low spreads), and many traders think they know enough about the company to confidently place a trade.

Explore the articles below to see the exact costs of an Apple CFD trade at specific brokers; how those costs compare to the rest of the brokerage market; and a reminder of the general risks associated with trading Apple and other stock CFDs.

S&P 500 index CFD fees

S&P 500 index CFDs are popular with traders who want to place bets on the wider US stock market, and it's an instrument that's available at virtually all CFD brokers. However, differences among brokers in trade pricing can be significant.

To avoid any surprises, browse the list below to see the exact cost breakdown of an S&P 500 index CFD trade at some of the world's top brokers.

S&P 500 index CFD spreads

At most CFD brokers, spreads will be the most important part of your trading costs, so you should keep a close eye on these. Check below what the spread is for S&P 500 CFDs at the broker of your choice, and see how it compares to spreads at more than 50 other CFD brokers. Spreads displayed in the articles below are updated regularly.

Euro Stoxx 50 CFD fees

Euro Stoxx 50 index CFDs are popular with traders who want to speculate on the price movements of top European stocks. However, the costs of a Euro Stoxx 50 CFD trade can differ greatly from one broker to another.

Browse the articles below to see broker-specific cost breakdowns of a Euro Stoxx 50 index CFD trade, based on regularly updated spread data.

CFD financing rates

For CFD traders who hold their positions for more than one day, financing rates become a key component of their trading costs. Financing rates can differ greatly from broker to broker but also from one instrument to another.

In the articles below, you can view broker-specific financing rates for some popular stock and stock index CFDs, based on regularly updated data. We also recap some of the basics about what financing rates mean, including an example of how financing charges are calculated.

FAQs

What are the typical types of fees associated with CFD trading?

Spreads (between the bid and ask price of an asset), flat or percentage-based commissions, and overnight fees are the most important fee types you’ll face when trading CFDs.

How can I minimize CFD trading fees?

Look for assets with high liquidity and low volatility, as these typically come with narrower spreads. Also, you can avoid overnight fees by opening and closing your positions on the same day.

Are there hidden fees in CFD trading?

The spread between the bid and ask price of an asset is used by brokers to make money on a trade. Spreads will likely be your main cost item when trading CFDs, especially if your broker charges no (separate) commission. Spreads for each asset are transparently displayed on your broker's trading platform.

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Author of this article

Tamás Gyuriczki

Trading Titan | Investment • Stock Market • Market Analysis

As a financial expert with BrokerChooser, I play an integral role in the analyst team by actively reviewing many of the 100+ brokers that are listed on our site. I personally open accounts with real money, execute trades, test customer services. My hope is that my first-hand experience with these brokers, incorporated in our reviews, helps users find the most suitable broker for their needs.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

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