CFD spreads: when you start trading, you quickly realise that CFD spreads play a decisive role in the results you can expect. The choice of market, trading strategy, trading style and even broker all depend on how spreads are priced. Spreads are one of the main components of broker fees on the stock market.
CFD Spread Definition
A spread is the difference between the buy price and the sell price of a CFD. It is a cost for the trader and income for the broker. On the financial markets, the price at which you buy will always be higher than the price at which you sell, with the value of the underlying asset sitting in the middle.
A CFD, for its part, is a contract between a broker and its client in which one party is the buyer and the other the seller. In this contract, the parties trade the changes in value of an exchange-listed underlying asset.
The lower the broker’s fees, the more profitable it is for traders. In some markets, you will mainly hear about commissions, or a combination of commissions and spreads.
When you place an order on the market, you are targeting a market move, so you can place either a buy or a sell order. Once the current price moves beyond the spread, you start making a profit. In other words, fees or commissions are covered before you pocket a single penny.
On related topics, our articles “Spread Betting for Beginners” and “ESMA CFD Rules” are a useful complement to this guide.
Top Brokers with the Best CFD Spreads
CFD Spread Example: How Does It Work?
A broker’s price board shows an asset’s prices. You can see the asset’s buy price and sell price, known as the ask and the bid. The spread on the asset is the difference between its buy price and its sell price.
This trading screen shows the bid and ask prices of a financial asset: 1.20633 to sell and 1.20646 to buy. If you bought the asset and sold it again within the same millisecond, you would make a loss equal to 1.20646 − 1.20633, i.e. 1.3 pips. This represents the commission or fee paid to the broker for opening the position.
These values are not the same everywhere: they can vary from one broker to another and from one asset to another, as several factors affect them.
What Does the Spread on a CFD Represent?
The CFD spread is the total cost borne by investors who trade CFDs on the markets.
Pros and Cons of CFD Spreads
Trading with spreads has its advantages and disadvantages, and you need to know them before entering the financial markets. These are sometimes small details that nonetheless have a significant impact on a trader’s profitability or success.
- The main advantage is that it is an all-in payment. Traditional brokers charge buying fees, selling fees, ticket fees and so on.
- The drawback mainly concerns scams and misleading advertising. Brokers often advertise low fees just to persuade traders to make a first deposit on their platform. Once you start trading, the charges turn out to be different from what was originally promised.
What Types of CFD Spreads Are There?
Trading costs come in several forms: some brokers charge commissions, others charge both spreads and commissions, and others charge spreads only. Spreads can be fixed or variable, depending on your broker.
1. Variable CFD Spreads
These are fees that vary depending on trading conditions. Here, traders can build a trading plan around the opportunities that arise, while having a real-time estimate of the fees payable on their positions.
Factors That Affect CFD Spreads
Although spreads vary from one asset to another and often from one broker to another, certain market conditions can instantly change the size of the spread. These factors include:
- Factors that widen spreads: fees increase when trading volume falls — generally in the morning when investors are considering their investments, around midday as the temporary break approaches, and in the evening just before the close. Volatility can also widen spreads: a volatile market offers many opportunities, which in turn pushes spreads up. The market is very often volatile ahead of economic announcements;
- Factors that narrow spreads: while fees rise in volatile, low-volume markets, they fall considerably when trading volume increases.
Diversifiez votre patrimoineInvestissez dans l’artDes tableaux originaux, pièces uniques signées par l’artiste. Un actif tangible, loin des écrans et des cotations.Voir les tableaux →2. Fixed CFD Spreads
These are spreads that do not change regardless of market conditions. With fixed spreads, traders know the cost of their trades in advance, but this raises a major issue: with these fees, the broker effectively acts as a market maker.
3. CFD Commissions
Instead of spreads, some brokers charge commissions on their clients’ positions. “Zero-fee trading” usually refers to brokers that charge commissions. The best broker for trading with commissions in France remains eToro.
Read also: Commission-Free Brokers
 ★★★★★ 5/5 | Leverage: 1:500 Spreads: from 0.0 pip | Regulation: ASIC, FCA, CIMA, VFSC Minimum Deposit: €200 | Trade Now |
CFD Spreads by Financial Market
It is impossible to cover CFD spreads for every market exhaustively. However, we can look at average fees across the financial markets.
1. Index CFD Spreads
INDICES | Average Spreads |
DAX 30 | 1 point |
CAC 40 | 1 point |
DJI 30 | 1.8 points |
S&P 500 | 0.4 points |
FTSE 100 | 1 point |
2. Stock CFD Spreads
STOCKS | Average Spreads |
Eurozone stocks | €5 |
Italian stocks | €10 |
Greek stocks | €25 |
UK stocks | £10 |
US stocks | $15 |
Canadian stocks | 25 CAD |
Indian stocks | $15 |
Australian stocks | 8 AUD |
Japanese stocks | 1500 JPY |
3. Forex CFD Spreads
Forex beginners often ask the same main question: what is a forex spread? The answer is simple: the forex spread is the difference between the bid rate and the ask rate of a currency pair — the gap between supply and demand for that pair.
Below is an estimate of current CFD spreads in the market.
FOREX | Average Spreads |
EURUSD | 0.6 points |
USDJPY | 0.7 points |
AUDUSD | 0.6 points |
EURGBP | 0.9 points |
GBPUSD | 0.9 points |
4. Metal CFD Spreads
METALS | Average Spreads |
Gold | 0.3 |
Silver | 2.5 |
Copper | 30 |
5. Bitcoin CFD Spreads
Broker | Spreads Bitcoin CFD |
|---|---|
 | 0.75% |
 | $0 |
 | 0.25% |
Comparison of the Best CFD Broker Spreads
It is important to choose the right broker to invest with. Many brokers offer trading services in France, so it is important to study each broker’s offer carefully, taking your goals into account, before choosing who to trade with.
1. Best Forex CFD Spreads
BROKER | EURUSD | USDJPY | EURGBP | GBPUSD | USDCHF | AUDUSD | USDCAD | EURCHF |
|---|---|---|---|---|---|---|---|---|
 Try it | 0.5 | 1 | 1.7 | 1.2 | 1.6 | 0.9 | 1.7 | 1.7 |
| 0.9 | 1.1 | 1.5 | 1.6 | 1.6 | 1.1 | 2 | 2 |
 Try it | 0.6 | 0.9 | 1 | 1 | 1.2 | 1 | 1.6 | 3.8 |
2. Best Index CFD Spreads
BROKER | DAX 30 | CAC 40 | DJI 30 | S&P 500 | Nasdaq 100 | Nikkei 225 | Stoxx 50 | FTSE 100 | |
|---|---|---|---|---|---|---|---|---|---|
| 0.8 | 1.1 | 1.1 | 0.3 | 1 | 9 | 1.5 | 1.1 | Try it |
| 1.5 | 1 | 3 | 0.25 | 1 | 10 | 1 | 1 | Try it |
| 2 | 10 | 6 | 0.75 | 2.4 | 10 | 3 | 1.5 |
3. Best Commodity CFD Spreads
BROKER | GOLD | BRENT | WTI | NATGAS | Silver | PALLADIUM |
|---|---|---|---|---|---|---|
| Try it | 0.32 | 0.036 | 0.027 | 0.005 | 0.032 | – |
| Try it | 0.34 | 0.02 | 0.03 | interbank + 0.002 | 0.029 | interbank + 0.65 |
 | 0.45 | 0.05 | 0.05 | 0.01 | 0.05 | 20 |
4. Best Cryptocurrency CFD Spreads
Broker | Bitcoin | Bitcoin cash | Ethereum |
|---|---|---|---|
| 0.75% | 1.90% | 1.90% |
 | 0.91% | 1% | 1% |
| 0.25% | 0.75% | 0.28% |
Brokers Without CFD Spreads
Some brokers do not charge spreads but commissions instead. There is no such thing as a completely fee-free broker, since fees are how brokers earn money. Nevertheless, some brokers offer free trading on certain instruments.
1. Spread-Free Trading with eToro
At eToro, it’s not about spreads but about commissions. eToro is known as the go-to zero-fee broker, not because its services are free, but mainly because, as well as only charging commissions, eToro’s rates are fairly low compared with its competitors.
You can therefore trade stocks and ETFs on eToro with 0% commission, with no management, rollover, ticket or additional brokerage fees.
However, this does not apply to stock CFDs, which are subject to brokerage fees from 0.09%.
2. Trading CFDs with Interactive Brokers
Interactive Brokers is also a broker without spreads: it charges commissions rather than fees. At Interactive Brokers, you can trade the vast majority of stocks, indices, commodities and currency pairs available on the financial markets.
Interactive Brokers’ rates vary depending on the markets and instruments traded. North American markets offer plenty of trading opportunities and therefore fairly high commission rates, while European indices and stocks are subject to slightly lower rates.
3. IG Markets CFD Spreads
IG Markets charges both fees and commissions on its clients’ orders, either on stocks or on other financial instruments. At IG Markets, you will therefore pay commissions on stock trading and fees on commodities, indices and forex.
CFD spreads on DEGIRO, however, are clearly defined fixed fees. It offers low-cost services, although the broker has been the subject of a number of allegations of bad faith. The best option therefore remains eToro, which offers quality services at a lower cost.
CFD Spread Trading Strategies
You can only succeed as a trader if you have an excellent command of the subject. Paying fees is unavoidable when trading, but you can still trade profitably by keeping a close eye on costs. Here are two trading strategies that take CFD fees into account.
- Gold CFD trading strategy: this strategy is based on trading gold, a very volatile instrument, and requires the use of moving averages. It suggests opening positions slightly above support levels, at pivot points and when the RSI is above 50.
- Extreme scalping strategy: this is an aggressive scalping strategy with targets of 5 to 15 points on open positions. It is mainly based on Bollinger Bands and the exponential moving average.
Conclusion: How to Trade with the Lowest Spreads
In France, you can choose between Vantage and eToro as your broker to benefit from the lowest CFD trading fees. To conclude, spreads or commissions are the broker’s income and the costs traders bear on the positions they open on a financial market. For good profitability, it is therefore important to work with the broker that makes the best offer.