chevron_left

chevron_right

Best CFD Investment Accounts in Singapore

Upping your investment game with CFDs (Contract For Difference)? Discover the top regulated CFD trading brokers in Singapore on SingSaver, from their pros & cons to the fees involved.

Overview of top CFD brokers

Finding the best CFD broker in Singapore for your needs? Check out the unique features of each platform here:

City Index: Known for its robust trading platform with advanced charting tools and a wide range of educational resources, making it a strong choice for both beginner and experienced CFD traders.
CMC Markets: Offers a diverse range of CFD instruments, including forex, indices, commodities, and cryptocurrencies, coupled with competitive spreads and high-quality research tools.
IG: A well-established global broker with a strong reputation for its excellent customer service and comprehensive market analysis, providing valuable insights for CFD traders.
OANDA: Provides a user-friendly platform with transparent pricing and reliable execution, appealing to traders who prioritize a straightforward trading experience.
Plus500: Offers a simple and intuitive platform that's particularly well-suited for beginners, alongside a diverse selection of CFDs and risk management tools.
ProsperUs: Caters specifically to Singaporean traders with localized market insights and support, along with competitive pricing on popular CFD instruments.
Saxo: A premium broker offering a sophisticated trading platform with advanced features and a wide array of CFDs, ideal for experienced traders seeking a comprehensive solution.

Comparison of the best CFD brokers

Broker	Regulation	Min. Commission Fee	Min. Deposit (SGD)	Days to Open Account	Platforms	Assets
City Index	ASIC, MAS, FCA	S$8	S$150	1 day	City Index Web Trader, MetaTrader 4, TradingView	Forex, commodities, indices, shares, ETFs
CMC Markets	ASIC, MAS, FCA, CIRO, FMA, BaFin	S$10	S$10	1 to 3 days	Web, Mobile, Meta Trader	Forex, Commodities, Bonds, Equities, Indices, Cryptocurrencies
IG	ASIC, FCA, FMA	S$10	S$0	1 to 3 days	Web, Mobile	Forex, Commodities, Indices
OANDA	MAS, CIRO, ASIC, FCA, NFA/CFTC	S$50	S$0	1 day	Web, Mobile, Meta Trader	Forex, Commodities, Bonds, Indices
Plus500	ASIC, CySEC, MAS, FCA, FMA, DFSA, EFSA, FSA, FSCA	S$0	S$200	1 to 3 days	Web, Mobile	Forex, Commodities, Equities, Indices, Options
ProsperUs	MAS	US$5	S$0	1 to 2 days	Web, Mobile	Bonds, Equities, Indices, Reits, Options
Saxo	ASIC, FINMA, FCA, MAS	S$3	S$3	1 week	Web, Mobile	Forex, Commodities, Bonds, Equities, Options

Contract for Difference (CFD) trading explained

What is CFD trading?

CFD stands for Contract for Difference. It's a financial instrument regulated by the Monetary Authority of Singapore (MAS) that lets you speculate on price movements of various assets like shares, indices, forex, and commodities without actually owning them. Essentially, you're entering a contract with a CFD trading broker to settle the difference between an asset's opening and closing price.

Key Features:

Leverage: Amplify your potential profits (and losses) with borrowed funds. This allows you to control a larger position with a smaller initial investment.
No Ownership of Underlying Asset: Trade on price movements without owning the underlying asset, providing flexibility and access to a wider range of markets.
Short Selling: Profit from falling markets by "selling" an asset you don't own and buying it back at a lower price.

How do CFDs work?

At its core, CFDs are relatively simple financial instruments. After all, you’re just speculating the direction and degree to which an asset’s price will move. For every point that the price moves, you make a gain or loss multiplied by the number of units that you have purchased or sold.

CFDs also complement your existing investment portfolio by hedging against losses. For example, you can turn a profit by making a short CFD trade in Business X should you hold its shares, while believing that they will lose value soon and will take some time to recover.

Pros and cons of CFD trading

Pros:

CFDs allow for margin trading – meaning you put up a small amount of money that represents the contract’s full value
CFDs have good synergy with existing investment portfolios, allowing investors to profit even during market downturns
There is a variety of financial vehicles that allow for CFD trading, including currencies, commodities, stocks, ETFs, and others
There is no limit to how many trades you can make a day, unlike other markets that might require a certain level of capital or account type

Cons:

Spreads can be wide, especially when prices are highly volatile. This causes the trading cost incurred to be high as well.
CFD trading is poorly regulated, causing this investment to be banned in the USA.
There are usually two fees that you have to pay for trading CFDs:
1. Spread: Akin to spreads in Forex trading
2. Holding fee: Charged when you hold an open position past a certain time every day

CFD: Margin and leverage

Margin and leverage are two sides of the same coin in CFD trading. Margin is the amount you put down to open a position, while leverage allows you to control a larger position with that margin, magnifying both potential profits and losses.

Margin is essentially a good faith deposit you provide to your CFD trading broker to open and maintain a position. It represents a percentage of the total value of your trade. This percentage, known as the margin requirement, varies depending on the asset you're trading and the broker's policies. For example, if the margin requirement for a particular trade is 10% and you want to open a position worth $10,000, you'll need to put down $1,000 as margin.

Leverage allows you to control a larger position with a smaller initial outlay. It's the ratio of the total value of your position to your margin. In the example above, with a 10% margin requirement, you have a leverage of 10:1. This means that for every $1 of your own money, you can control $10 worth of the asset. While leverage can magnify your profits, it also magnifies your losses, potentially exceeding your initial investment. Therefore, it's crucial to use leverage responsibly and implement appropriate risk management strategies.

Choosing a CFD broker

With numerous CFD brokers available in Singapore, selecting the right one can seem daunting. The best CFD broker for you will depend on your individual needs and preferences. Consider these key factors to make an informed decision:

Ah, I understand now! You want the advice to be more tailored to different trader profiles and their specific needs.

Here's the revised section with that personalized approach:

Choosing a CFD broker in Singapore

The best CFD broker for you will depend on your individual needs and trading style. Here's what to consider before choosing:

Regulatory compliance

For the cautious beginner: Look for CFD brokers in Singapore licensed by the Monetary Authority of Singapore (MAS). This ensures your funds are protected and the broker adheres to strict local standards, providing a safe and reliable trading environment.
For the international trader: If you plan to trade derivatives in multiple markets, consider brokers regulated in other major jurisdictions like the UK (FCA) or Australia (ASIC), in addition to MAS, for broader protection.

Fees and commissions

Trading small amounts? Prioritise brokers with low minimum deposit requirements and no inactivity fees. Commission-free trading on certain assets can also be beneficial.
Trading large amounts? Focus on tight spreads, especially if you're a frequent trader. Negotiate lower commission rates if possible. Consider brokers offering VIP accounts with preferential pricing for high-volume traders.

Asset coverage

For the forex specialist: Choose a broker with a wide range of currency pairs, competitive spreads, and advanced charting tools specifically for forex trading.
For the diversified trader: Opt for a broker offering CFDs on a variety of asset classes, including indices, commodities, shares, and cryptocurrencies, to expand your trading opportunities.

Trading platform and tools

For the beginner: Prioritise a user-friendly platform with intuitive navigation, educational resources, and demo accounts to practice trading.
For the experienced trader: Look for advanced charting tools, customisable indicators, automated trading options, and access to third-party platforms like MetaTrader 4 for greater flexibility.

Is CFD trading legal in Singapore?

expand_more

Yes, CFD trading is legal in Singapore. All CFD trading brokers must be regulated by the Monetary Authority of Singapore (MAS) to ensure they adhere to strict financial guidelines and safeguard your interests.

is CFD trading safe?

expand_more

CFD trading bears a higher risk compared to other investments because you have to utilise margin trading for the most part.CFDs are also speculative in nature. Furthermore, since you have not actually purchased the contract’s underlying assets, you need to determine what rights you have.

On the other hand, CFD trading gives you the opportunity to diversify your portfolio and hedge against any potential losses. You’re given access to markets across the globe and aren’t just limited to Singaporean or even Asian financial instruments.

What is the difference between stocks and contract for difference (CFD)?

expand_more

When you purchase stocks, you have to take ownership of the stocks, be it in your custodian or CDP account. When you trade a CFD, you do not own the underlying shares. Rather, you speculate on the share price by buying a contract between you and the CFD provider.
When trading CFDs, you also enjoy the use of leverage whereby you do not have to fork out the full market value of the share to make the trade.

What are the costs of CFD trading?

expand_more

Like Forex, you’ll need to pay the spread when trading CFDs. This refers to the difference between the bid and ask price of a CFD; it can vary from one asset to another depending on their volatility. Most brokers also charge a holding fee should you keep a position open overnight due to changing interest rates.

What are the risks of trading CFD?

expand_more

While CFDs offer exciting opportunities, it's crucial to understand the associated risks:

High Leverage Risk: Leverage can magnify both profits and losses. Even small market movements can result in significant gains or losses, potentially exceeding your initial investment. It's essential to use leverage cautiously and implement appropriate risk management strategies.
Market Volatility: CFD prices closely follow the underlying asset's price movements, which can be volatile. Rapid price fluctuations can lead to substantial losses, especially for leveraged positions. Always stay informed and closely monitor your trades.
Counterparty Risk: When trading CFDs, you're essentially entering a contract with the broker. There's a risk that the broker may default on its obligations, particularly if it's not well-regulated or financially stable. Always choose a trusted and regulated CFD trading broker in Singapore that is licensed by the MAS.

How do I know if a broker is regulated by MAS?

expand_more

You can verify a broker's MAS regulation by checking the Financial Institutions Directory on the MAS website. Look for the broker's name or license number to confirm their regulatory status. Most brokers will also display their MAS license information on their website.

What other considerations do you need to keep in mind?

expand_more

CFD trading is fast-paced and can be applied to almost any financial instrument. Therefore, you might want to start by demo trading for several months to learn the ropes and get used to your preferred broker’s features and tools.

Take this time to determine which financial instruments you would like to trade CFDs in and see how you can weave this into your investment portfolio as a whole.

Best CFD Investment Accounts in Singapore

CMC Markets

Offer Available

Things to consider for this product:

Saxo Markets

Offer Available

Things to consider for this product:

uSMART SG

Offer Available

City Index

OANDA

IG

Plus500

ProsperUs by CGS-CIMB

Overview of top CFD brokers

Comparison of the best CFD brokers

What is CFD trading?

How do CFDs work?

Pros and cons of CFD trading

CFD: Margin and leverage

Choosing a CFD broker

Choosing a CFD broker in Singapore

Regulatory compliance

Fees and commissions

Asset coverage

Trading platform and tools

Latest CFD Investment News

Need some help with CFD?

Is CFD trading legal in Singapore?

is CFD trading safe?

What is the difference between stocks and contract for difference (CFD)?

What are the costs of CFD trading?

What are the risks of trading CFD?

How do I know if a broker is regulated by MAS?

What other considerations do you need to keep in mind?

Best CFD Investment Accounts in Singapore

CMC Markets

Offer Available

Things to consider for this product:

Quick Facts

Saxo Markets

Offer Available

Things to consider for this product:

Quick Facts

uSMART SG

Offer Available

Quick Facts

City Index

Quick Facts

OANDA

Quick Facts

IG

Quick Facts

Plus500

Quick Facts

ProsperUs by CGS-CIMB

Quick Facts

Quick Facts

Overview of top CFD brokers

Comparison of the best CFD brokers

What is CFD trading?

How do CFDs work?

Pros and cons of CFD trading

CFD: Margin and leverage

Choosing a CFD broker

Choosing a CFD broker in Singapore

Regulatory compliance

Fees and commissions

Asset coverage

Trading platform and tools

Latest CFD Investment News

Need some help with CFD?

Is CFD trading legal in Singapore?

is CFD trading safe?

What is the difference between stocks and contract for difference (CFD)?

What are the costs of CFD trading?

What are the risks of trading CFD?

How do I know if a broker is regulated by MAS?

What other considerations do you need to keep in mind?