A Contract for Difference is a leveraged derivative that mirrors the price movement of an underlying instrument, a share, an index, a commodity or a currency pair, without ownership of the underlying asset. You post margin, you go long or short, and you settle the difference in cash when you close the position. The mechanics are simple, the risk management is anything but.

In the UK, CFDs are regulated by the Financial Conduct Authority under the same rules that govern spread betting. Retail leverage is capped at 1:30 on major FX, 1:20 on non-major indices and gold, 1:10 on other commodities and non-major equity indices, 1:5 on individual shares, and 1:2 on crypto CFDs. Negative balance protection is mandatory for retail clients, and margin close-out kicks in at 50% of required margin.

The advantage of a CFD over a physical position is capital efficiency and the ability to short. The disadvantage is that gains are subject to Capital Gains Tax, positions carry overnight financing, and the leverage that makes CFDs attractive is the same leverage that produces the FCA-mandated risk warning you see on every broker page, 69% to 82% of retail investor accounts lose money.

The rest of this page unpacks the discipline in detail, the FCA-regulated brokers we recommend for each sub-use-case, the pros and cons written honestly rather than promotionally, the key features to check on any prospective broker, and a detailed FAQ answering the questions our editorial desk gets asked most often about cfd trading. Read it top to bottom on your first visit, then bookmark the sections you will need to reference again once you have opened and funded a live account.

A note on scope. This guide focuses on retail traders resident in the United Kingdom, trading through FCA-authorised UK entities under the retail-client leverage caps that came into force in August 2018 and were extended in the FCA's 2024 policy statement. If you qualify for professional-client status, or you trade through a non-UK entity, some of the numbers below will differ, in particular the leverage ratios, the negative-balance protection, and the eligibility for FSCS cover. We flag those differences explicitly in the sections that follow rather than glossing over them.

Every broker on this page has been opened, funded and tested on a live account by our editorial desk. We do not accept broker-supplied performance figures. Execution latency is measured against a fixed benchmark route, all-in cost is calculated across a normalised set of session hours, and platform features are documented directly from the live UI rather than from marketing pages. Where a broker offers multiple account tiers, we test the tier a typical UK retail client would be defaulted into on signup, not the professional or high-volume tier used in the sales collateral.

For cfd trading specifically, we weight the criteria that matter most to the discipline. Latency and raw spread matter for scalping, financing charges and guaranteed-stop pricing matter for swing trading, API depth and backtester quality matter for algorithmic trading, and platform stability matters for every long-term user. We also weight the qualitative signals that rarely appear in league tables, the tone of the onboarding, the honesty of the risk disclosures, the speed of the support response outside London hours, and the ease of closing an account and withdrawing residual balances when a relationship ends. Read our full How We Test methodology for the complete framework, including the fixed data-set we use across every review cycle so the numbers stay comparable from one broker to the next.

Nothing on this page is a personal recommendation. Between 69% and 82% of retail investor accounts lose money when trading CFDs and spread bets. Please only trade with capital you can afford to lose in full, and consider taking regulated independent advice before you commit a material share of your net worth to any single discipline.