TheTraderWiki doesn’t rank brokers. The broker comparison shows what each one publishes, in alphabetical order, and the weighing is yours.
Key points
- A market count is a total of instruments. It tells you nothing about costs, protection or how your orders are filled.
- The company that opens your account and its regulator decide your leverage limit, your margin close-out level and whether you get negative balance protection.
- Your trade costs come from the spread, commission, overnight financing and currency conversion. How long you hold the trade shifts the mix of these costs.
- Execution, slippage and price gaps decide how closely your fill matches the price you wanted.
- Account terms such as the smallest trade size, withdrawal terms and inactivity fees apply to every market you trade.
What a market count shows, and what it leaves out
A market count shows how many instruments a broker lists, including currency pairs, indices, commodities and share CFDs. Brokers count in their own ways, and a single group can state two different totals for what you can trade. The broker comparison records each total as the broker publishes it.
The market count leaves out what happens after you open a trade. Two brokers that both list the same currency pair can offer you different leverage, charge a different spread and financing rate, and fill your stop-loss differently when the price jumps. Those terms reach your account on every trade. A market you never trade costs you nothing and earns you nothing.
The factors that shape a trade, and where each is covered
The factors that shape a CFD trade more than the market count are listed below, with what each one decides and the page that covers it.
| Factor | What it decides | Where it’s covered |
|---|---|---|
| The company that opens your account | Whose rules apply to you | Broker groups |
| Leverage | How big a trade your margin can open, and how fast a loss uses it up | Leverage and margin |
| Conditions on high leverage | Whether a high leverage figure lasts as your balance grows, and when the broker can cut that figure | Broker comparison |
| Margin close-out level | When the broker closes your trades for you | How a trade works |
| Negative balance protection | Whether you can lose more than your balance | Broker groups |
| Client-money segregation | Whether your deposits are held separately from the broker’s own money in the event of its failure | Choosing a provider |
| Spread and commission | What you pay to open and close each trade | Costs and fees |
| Overnight financing | What you pay or receive for each night a trade stays open | Costs and fees |
| Execution and slippage | How close your fill is to the price you asked for | Choosing a provider |
| Requotes, and who takes the other side | Whether the broker can reject your order and offer a new price, and whether it takes the other side of your trade itself | Choosing a provider |
| Trading hours and gaps | When you can trade, and how far a price can jump while you can’t | Trading hours |
| Smallest trade size and lots | Whether a small balance can follow a sensible risk rule | Pips and lots |
| Currency conversion | What you pay when a market is priced in another currency | Costs and fees |
| Deposit and withdrawal terms | How you pay in, and how fast and at what cost you get money out | Choosing a provider |
| Inactivity fee | What the account costs while you aren’t trading | Costs and fees |
| Withdrawal and market data fees | What you pay to withdraw funds, and for live prices from some exchanges | Costs and fees |
| Platform and order types | Which orders you can place and how they’re set up | Order types |
| Support and complaints | Whether you can reach support in your language at the hours you trade, and the route to the ombudsman | Choosing a provider |
Protection: the company, leverage, close-out and negative balance protection
The company that opens your account, and its regulator
A broker brand is usually a group of companies, and each one holds a licence from its own country’s regulator. The company that opens your account is the one whose rules apply to you, whatever the brand is called. Most groups choose that company by the country you live in when you sign up (broker groups). Every global company covered here is regulated in its own country. At a global company, the protection against leverage is different from what you’d get from a UK, EU or Australian company. You get the protections of that one company, however many markets a brand lists.
Leverage
Leverage controls how large a trade your margin can open. A company licensed in the EU or the UK caps a retail client at 30:1 on a major currency pair (ESMA ESMA Decision (EU) 2018/796, FCA PS19/18). A global company picks its own limit, and the broker comparison lists figures up to 500:1. With higher leverage, the same price move becomes a bigger slice of your deposit in either direction (maximum leverage).
Conditions attached to high leverage
High leverage often carries conditions, and you can expect more of them as the figure rises (broker comparison). The rate can fall on its own once your balance climbs past a few thousand dollars. It can also need a request, and the broker can say no. Some companies publish a tier table that shows how leverage falls as a trade gets bigger. Where a company publishes nothing, you find out how leverage behaves only on an open trade (leverage by broker). A lower figure can be cut too if the broker decides you’re using the account in a way its terms don’t allow. Client agreements call this abusive trading, and the broker, not a regulator, decides what counts as abusive.
Margin close-out level
The margin close-out level is the point when your broker closes your trades because your equity has fallen too far. A company regulated in the EU or the UK closes you out when your equity drops to 50 % of the margin your open trades need (ESMA Decision (EU) 2018/796, FCA PS19/18). A global company sets the level in its own terms. Your trades close at the market price of that moment, and that price is often the worst point of a move (how a trade works).
Negative balance protection
Negative balance protection means you can’t lose more than the money in your account. Retail clients must receive it from any company holding a UK, EU or Australian licence. At a global company, what you get depends on the company: it can be a right, a courtesy the company can withdraw or absent (global companies). If a price gaps past your stop, this rule settles who pays any amount beyond your balance.
Client-money segregation
Client-money segregation means your deposits sit in bank accounts that are separate from the broker’s own funds. When the company that opens your account is authorised in the UK or the EU, the broker can’t touch that money. Its creditors also can’t claim it if the broker fails. Segregation shields you if the broker fails, but not against trading losses (choosing a provider). A global company’s promise to keep your money apart is only as strong as its own regulator’s supervision. One global company’s contract states that money stops being client money the moment it becomes margin. Under that contract you’d rank as a general creditor if the company failed (global companies).
Costs: spread, commission, financing and conversion
Spread and commission
The spread is the difference between the buy price and the sell price, and you pay it in full on every completed trade. Some providers only charge you through the spread. Others charge a commission as well, offering a narrower spread in return, so the only fair comparison is all-in (account types). The spread you see advertised is the best case. Spreads widen at the market open, around data releases and overnight (costs and fees).
Overnight financing
Overnight financing, often called the swap, is charged on any trade you still have open when the broker’s daily cut-off arrives. It’s calculated on the full size of the trade, not on your margin, and one night each week carries three nights of charge to cover the weekend (costs and fees). Financing can cost more than the spread on a trade held for weeks. The all-in comparison sets a day trade beside a six-week hold.
Currency conversion
Currency conversion applies when a market is priced in a currency that differs from your account’s. The broker turns your profit or loss into your account currency at its own rate, with a mark-up added. Sometimes it does the same for your margin. This cost is one of the hardest to spot (costs and fees). You pay it more often the more of your markets are priced in other currencies.
Execution, slippage, trading hours and gaps
Execution is how a broker fills your orders. Its execution policy tells you whether you’ll get the price you requested or the next one available. Slippage is the gap between those two prices. The policy also states whether a better price goes to you or is kept (how a trade works). A UK or EU licensed company must publish this policy, and a global company follows its own regulator’s rules (choosing a provider).
Trading hours decide when you can trade, and price gaps decide what happens to your orders while you can’t. A CFD follows the hours of its underlying market. When news breaks while a market is closed, the first price at the open can be far from the last close. A stop-loss then fills at the first available price, and that danger is called gap risk (trading hours, stop-loss orders). Spreads also widen around the daily rollover, when few banks are quoting.
The execution policy also says when the broker requotes, meaning it rejects your order and gives you a new price (how a trade works). It says whether the broker takes the other side of your trades itself or passes your orders to another firm (choosing a provider). A broker that takes the other side and sets its own buy and sell prices is called a market maker.
Account terms that apply to every market
Account terms apply whichever market you trade, so they reach every trade you make.
- Smallest trade size and lots
- The smallest trade size decides whether a small balance can follow a sensible risk rule. An account that only allows large trades forces a small balance to risk too much on each one (pips and lots, account types).
- Deposit and withdrawal terms
- The broker’s documents list the payment methods, the processing time, any fee and any conditions, such as withdrawing to the method you paid in with. A small withdrawal early on tests all of them (choosing a provider). Which payment rails local to your country a broker accepts also differs from broker to broker.
- Inactivity fee
- An inactivity fee is a monthly charge on an account that hasn’t traded for a stated period. It is taken from your balance until the balance reaches zero or you trade again (costs and fees).
- Withdrawal fee
- A withdrawal fee is a charge for moving money out of your account. Some brokers waive it for a set number of withdrawals a month, and others waive it above a minimum amount. Sometimes the payment method charges the fee, not the broker (costs and fees).
- Market data fee
- A market data fee is a charge for live prices from certain exchanges. You’ll most often see it on share CFDs. Some brokers waive the fee if you trade a minimum volume (costs and fees).
- Platform and order types
- The platform controls which order types you can place, for example limit orders and trailing stops, and how the broker has configured them. A demo account lets you check both before you deposit (trading platforms).
- Support and complaints
- Support and complaints come with every account, whichever market you trade. Find out whether you can reach support in your language at the hours you trade. The broker’s terms and the regulator’s complaints page set out the route to the ombudsman (choosing a provider).
Risk warning
Good terms don’t change what a CFD does
Good terms don’t change what a leveraged trade does. A narrow spread, low financing and a careful execution policy make each trade cost less, yet the product’s risk stays the same. In 2018 ESMA reported national regulators’ findings that between 74 % and 89 % of retail accounts lost money (ESMA press release, 27 March 2018).
Questions about weighing a broker beyond its markets
Most questions about weighing a broker beyond its markets ask whether more markets is better and which factor matters most.
Is a broker with more markets better?
A broker with more markets isn’t better for you because of the number. What matters more are the terms on the markets you trade: the leverage, the spread and commission, overnight financing, execution and the protection of the company that opens your account. A market you never trade adds nothing to your results.
Which factor matters most?
The factor that matters most depends on how you trade. On a trade held for weeks, overnight financing can cost more than the spread and commission together. On a day trade, those two are the whole cost (costs and fees). A trade held over a weekend also carries gap risk, because the first price after the weekend can be far from the last close (trading hours). The licence of the company that opens your account comes before all of them (choosing a provider).
Where can I see these terms for each broker?
The terms for each broker appear on the broker comparison, in alphabetical order, and on its provider page, as the broker publishes them. If a broker doesn’t publish a figure, the page states that clearly. The broker comparison doesn’t rank providers, so deciding how to weigh them is your call.
Sources
The original documents this page cites, in the order they first appear.
- European Securities and Markets Authority, ESMA
- ESMA Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union, Official Journal of the European Union (EUR-Lex), 2018-05-22
- PS19/18: Restricting contract for difference products sold to retail clients, FCA, 2019-07-01
- ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors, ESMA, 2018-03-27