CFD trading is gaining popularity in India as it offers traders the ability to speculate on price movements of various assets like stocks, commodities, and currencies without owning them. The allure of high leverage allows for potentially significant profits, though it also comes with increased risk. While not explicitly regulated in India, many traders use international platforms that comply with global standards. The flexibility of going long or short enhances trading strategies, attracting both novice and experienced traders.
The term “Contract for Difference” (CFD) refers to an agreement between a trader and their broker. The “contract” sets out that one of the two parties will pay the other, depending on which direction the price of an asset moves. The amount of the cash settlement is calculated using the “difference” between the price at the open and close of the trade.
CFD trading is a method of trading the value of an underlying asset, rather than the asset itself. The “derivative” nature of CFDs makes them highly versatile and has resulted in the market, first developed in the 1990s, growing to be worth billions of dollars.
CFD trading involves entering into a contract with a CFD broker to exchange the difference in the price of an asset, such as shares of Nestle India Ltd, from when you open the trade to when you close it.
A key feature of CFD trading is leverage, which allows you to control larger positions with a smaller initial investment, or margin. For example, instead of purchasing the full value of shares in Nestle India Ltd, you only need to put up a fraction of that amount.
To illustrate this, let’s consider a scenario using CFDs to trade the NIFTY 50 index, a key benchmark representing the top 50 companies on the National Stock Exchange of India.
If you believe the NIFTY will rise, you would buy a CFD. Suppose each contract is priced at INR 24,800 and your broker requires a 5% margin. To open a position with 10 contracts, you would need a margin of INR 12,400 (calculated as 24,800 x 10 x 5%).
If the NIFTY increases to 25,000, you’d see a price gain of INR 200 per contract. By closing your position, you could realize a profit of INR 2,000 (10 contracts x INR 200), not accounting for any broker fees.
Here’s our curated list of the top CFD brokers in India for 2024. Each broker has been selected for their comprehensive range of services and features, tailored to meet your trading requirements. We prioritize trustworthiness, so only reputable companies are included. Every CFD broker featured here is authorized and regulated by a respected tier-one international regulatory body.
1. Pepperstone
With a strong focus on the trading experience, industry leading technology, low costs and award-winning client support, Pepperstone is a good option for the more established high volume day trader.
2. Markets.com
Markets.com is a prominent online trading platform that offers access to a variety of financial instruments including forex, indices, commodities, stocks, and cryptocurrencies. It provides a user-friendly interface and tools for traders to engage in CFD trading across multiple markets. Markets.com has been in business since 2009, and they’re fully regulated in five different major markets, including Europe and the UK. Markets.com is a global company with more than 5M registered accounts which is regulated in Europe, UK, BVI, Australia and South Africa.
They prioritize providing a secure and technologically advanced trading environment. The platform adheres to stringent regulatory standards, ensuring transparency and client protection. Utilizing state-of-the-art security measures, they safeguard client data and transactions. The trading platform is equipped with advanced tools for technical analysis and risk management, supported by a dedicated customer service team to assist clients promptly.
3. FP Markets
FP Markets is an established ASIC, CySEC and FSP regulated broker. They offer access to the industry leading MetaTrader platforms. There’s a copy trading service and they provide pricing directly from the market. That means fast execution and transparent pricing. A 24/7 multilingual client support service has won recognition through the highly respected Investment Trends awards.
4. Interactive Brokers
Interactive Brokers is one of the world’s leading futures brokers. They offer direct market access to a range of securities. The broker offers excellent platform stability, huge range of markets, and solid customer support.
When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.
Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients.
Risk Warning and Disclaimer: This article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform. Trading Contracts for Difference (CFDs) involves high leverage and significant risks. Before making any trading decisions, we recommend consulting a professional financial advisor to assess your financial situation and risk tolerance. Any trading decisions based on this article are at your own risk.
Best Stocks to Buy in 2025: investing in the stock market requires careful analysis of company fundamentals, industry trends, and macroeconomic conditions.
SoFi stock price analysis: SoFi Technologies, Inc. has emerged as a prominent player in the fintech industry, offering a wide range of financial services.
HIMS stock news: Hims & Hers Health, Inc., a telehealth company focused on providing healthcare services and products, recently faced a significant downturn in its stock price.
set cookie
