Trading contracts for difference is becoming a popular method to trade the major markets. Trading CFD’s allows one to use leverage to trade much larger position than traditional stock market investing which can be a double edged sword. One of the most respected providers of CFD trading systems is Plus500. However, there are also alternatives which are worth noting. Let us look at what many consider to be the four popular alternatives to Plus500 as well as a handful of the features that are provided to clients.
This London-based electronic trading platform was first established in 2002 and since then, it has been very respected by both novice and professional traders alike. It should therefore come as no great surprise that ETX Capital provides CFD trading systems as well as other options. There are four different sectors which can be catered to through ETX. These are:
- Currency pairs (Forex)
It is also important to note that there are a variety of subcategories within each of these sections. For instance, commodities include precious metals, energy segments and soft commodities (wheat, soybean and oats are a few). In the same respect, traders can take up positions within some of the largest markets in the world including the UK 100, the France 40 and the Germany 30. Forex pairs include popular currency relationships such as USD/GBP, EUR/GBP, USD/JPY and EUR/USD. Other worthwhile tools at the disposal of all clients are automated trading algorithms, market commentaries, guaranteed stop-loss orders and mobile-friendly architecture. ETX Capital is an excellent platform for experienced investors and those who may be new to CFD positions.
AvaTrade is a Dublin-based company that was founded in 2006. This firm has consistently scored very high in terms of flexibility and customer service. A minimum deposit of $100 dollars (or the equivalent currency) is required to activate an account. Miniature accounts, demonstration accounts, VIP accounts and segregated accounts all support CFD traded. Current investment portals include Meta Trader 4, Meta Trader 4 mobile, ACT and AVA Mobile Trader. Much like ETX Capital, AvaTrade provides its customers the ability to embrace CFD positions. The primary categories which are currently offered include:
- ETFs (electronically traded funds)
It is also important to mention here that leverages of up to 200:1 are provided on all CFD positions. While this is an excellent means to maximise one’s profit margins, losses can be just as profound. Any leveraged position should only be utilised after the risks are well understood.
Spreads will vary and these will primarily depend upon the asset that is being traded. Some spreads are as low as 0.3 pips although these are liable to change. It is wise to consult their online trading conditions portal to learn more as well as to note any updated figures. A few other benefits in regards to AvaTrade include a compatibility with both Windows and iOS mobile devices, chart-based trading, one-click execution orders and demonstration accounts.
Claiming to be the largest online trading platform within Australia, Pepperstone has been a favourite of investors for years. While suited for novice traders, Pepperstone themselves state that they specifically cater to institutional clients. Their CFD options revolve only around indices (as opposed to some other online portals). However, they also deal with the largest indices in the world such as:
- The France 40 Index
- The EU Stock 50 Index
- The UK 100 Index
- The US SPX 500 Index
- The US Tech 100 Index
This wide choice of indices provides investors with the ability to hedge one CFD position against another in real-time; critical to mitigate losses during unexpected market conditions.
Pepperstone is also known for their extremely low margin requirements. These are frequently associated with larger trades. Once again, margins should only be used after an in-depth appreciation of the risks as well as the potential rewards involved. A few other benefits to note are daily margin limits, the ability to activate a demonstration account and no less than $50,000 dollars (Australian) in funds once this account is confirmed.
eToro is another very well-known electronic trading platform. Currently based out of Limassol, this firm is advantageous in the fact that only %50 dollars (or the foreign currency equivalent) is required to establish a live trading account. It is also worth pointing out that eToro specialises in CFDs attached to blue-chip stocks within various markets. This system is one of the most liberal in terms of the instruments which are offered to the client. Some prime examples can be seen in flexible options such as:
- Guaranteed stop-loss orders.
- Guaranteed limit orders.
- Islamic accounts.
- Email and mobile phone alerts.
- A compatibility with Mac OS, iOS, Windows and Android operating systems.
With low spreads and no hidden fees, any profits (or losses) which may be incurred are absolutely clear from the beginning. This is not often the case with other trading platforms. This company uses its own proprietary software. The three options are eToro OpenBook, eToro WebTrader and eToro Mobile Trader.
One a final note, social trading is highly encouraged by eToro. Streaming news feeds, commentaries and the ability to follow the most successful investors can give a novice client the advantages that he or she requires to succeed.
These are four excellent alternatives to Plus500 in terms of trading contracts for difference. While their advantages are clear, past performance does not necessarily indicate future results. CFD trades are not without their fair share of risks. Any investor needs to appreciate this concept before entering into the world of online trading.
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