What are the Best CFD Brokers in Singapore?

What is a CFD or Contract For Difference?

The term CFD is the abbreviation for Contract For Difference.

A CFD is therefore a financial instrument in the derivatives category. Indeed, the value of a CFD is based on the performance of one or more underlying assets. The assets, represented by a CFD, can be diverse, such as stocks, indices, currencies, commodities, or even bonds or cryptocurrencies.

One of the particularities of CFDs is that they allow you to speculate on both the rise and fall of the prices of a financial asset.

The profit or loss generated when closing the position corresponds to the difference between the price of the underlying asset at the time of purchase and the price of this asset at the time of sale.

Attention!

81% of retail investor accounts lose money when trading CFDs.

What is a CFD Broker?

A CFD broker is a trading platform that allows investors to speculate on the price movements of a financial asset without actually owning the underlying asset. CFD stands for "Contract for Difference," a derivative product that reflects the price movement of an asset like a stock, currency, commodity, or stock index.

A CFD broker provides traders with an interface where they can buy (long position) or sell (short position) a CFD on a given asset. The difference between the entry price and the exit price determines the trader's profit or loss.

The main elements that characterize a CFD broker are:

• Market access: brokers generally offer a wide range of assets in the form of CFDs, including stocks, indices, Forex, cryptocurrencies and commodities.
• Leverage: traders can use leverage, allowing them to amplify their market exposure with reduced capital. However, this also increases the risk of losses.
• Trading fees: a CFD broker may charge spreads (the difference between the buy and sell price), commissions or financing fees for positions held open overnight.
• Regulation: In Singapore, CFD brokers must be registered with the Monetary Authority of Singapore (MAS) and comply with local regulations regarding investor protection and leverage limits.

Types of CFD Brokers: Market Maker vs STP/ECN

When choosing a CFD broker, it is important to understand the differences between Market Makers and STP/ECN brokers. These models influence order execution, fees and the trading experience.

What type of broker to choose?

• Market Maker: Ideal for beginner traders and those who prefer simple pricing with fixed spreads.
• STP/ECN: Suitable for experienced traders looking for lower costs, better transparency and direct access to the market.

What Regulations and Security Measures are in Place for CFD Brokers in Singapore?

​In Singapore, the official regulatory authority overseeing CFD brokers is the Monetary Authority of Singapore (MAS). MAS ensures that financial institutions adhere to stringent standards, safeguarding the interests of investors and maintaining the integrity of the financial system.​

CFD brokers operating in Singapore under MAS regulation must adhere to several key requirements designed to protect retail investors:​

• Client Suitability Assessment: Brokers are required to evaluate the knowledge and experience of clients before offering higher leverage options. This ensures that clients are adequately informed about the risks involved in CFD trading.​
• Negative Balance Protection: To prevent clients from incurring losses exceeding their deposits, brokers must implement measures that ensure account balances do not fall below zero.​
• Risk Disclosure: Brokers must provide clear and comprehensive information about the risks associated with CFD trading, enabling clients to make informed decisions.​
• Segregation of Client Funds: Client funds must be kept separate from the broker's own funds, ensuring that clients' money is protected even if the broker faces financial difficulties.​
• Capital Adequacy Requirements: Brokers must maintain sufficient capital reserves to meet their obligations and absorb potential losses, promoting financial stability.

How to Choose a CFD Broker?

​Choosing the right CFD broker is a crucial step for any trader aiming to speculate on financial markets. Several factors must be considered to ensure the broker aligns with your trading profile and adheres to prevailing security standards.​

1. Available Assets

A good CFD broker should offer a wide range of financial assets allowing traders to diversify their investments. Here are the main types of assets accessible as CFDs:

2. CFD Broker Regulation

Regulation is a fundamental criterion when selecting a reliable and secure CFD broker. In Singapore, brokers must be licensed by the Monetary Authority of Singapore (MAS), which enforces strict compliance and investor protection measures.​

Here are the key regulatory authorities to consider:​

Warning

Be cautious of unregulated brokers or those registered in offshore jurisdictions (e.g., Belize, Vanuatu), as they may not offer adequate investor protection.

3. Leverage in Singapore and Elsewhere

Leverage allows traders to amplify their market exposure with a smaller capital outlay. However, it also increases the potential for significant losses.​

In Singapore, the Monetary Authority of Singapore (MAS) has set maximum leverage limits for retail traders to mitigate risks:​

Professional traders may request higher leverage by waiving certain protections, but this is subject to regulatory approval and additional risk assessments.

4. Available Orders

A good CFD broker should offer a variety of trading orders to optimize strategies and better manage risk.

5. Available Features

The best trading platforms offer advanced features that facilitate analysis and order execution.

• Trading Platforms: MetaTrader 4 (MT4), MetaTrader 5 (MT5), TradingView, proprietary platforms.
• Charts and Technical Indicators: moving averages, RSI, MACD, Fibonacci, etc.
• Analysis and Reporting Tools: price alerts, trading signals, real-time market analysis.
• Mobile Compatibility: iOS/Android app for trading on the go.
• Trading Automation: trading robots (Expert Advisors on MT4/MT5) and APIs for algorithmic trading.
• Customer Service: assistance in English, 24/7 support via chat, phone or email.

Which CFD broker is suitable for a beginner trader in Singapore?

Choosing a CFD broker when you are new to trading can be difficult. Here are the essential criteria for selecting a broker suitable for novice Singaporean traders.

• Simple and intuitive platform: choose a broker with a clear interface like eToro or XTB. MetaTrader 4 (MT4) is also a popular option, but a bit more technical. It is recommended to test a demo account before going live.
• Regulation and security: a reliable broker must be regulated by the Monetary Authority of Singapore (MAS) or a recognised authority. It must guarantee protection against negative balance and segregation of client funds. Avoid offshore brokers (Belize, Vanuatu) that do not protect investors.
• Transparent and competitive fees: compare the spread (difference between buying and selling price), commissions (some brokers are commission-free on stocks/ETFs), overnight fees (swap) and deposit/withdrawal fees. Opt for a broker with tight spreads and free withdrawals.
• Customer support in English: check if the broker offers support in English via chat, email or telephone, as well as a detailed FAQ. Support available 24/5 or 24/7 is a real plus.
• Educational resources and training: a good broker for beginners should offer video tutorials, webinars and trading guides. A free and unlimited demo account is essential for practicing without risk.

How to Trade CFDs with an Online Broker?

Trading CFDs with an online broker involves several essential steps. Here’s a detailed guide to get started effectively.

1. Choose a Regulated CFD Broker

Before you begin trading, it’s essential to select a regulated and trustworthy CFD broker. In Singapore, always ensure the broker is licensed by the Monetary Authority of Singapore (MAS). Alternatively, brokers regulated by major international authorities such as the FCA (UK), ASIC (Australia), or CySEC (Europe) can also be considered, provided they comply with investor protection standards. Make sure the broker offers:

• A user-friendly trading platform
• Competitive spreads and low commissions
• Responsive customer support (ideally available in English and regionally accessible)

2. Opening a Trading Account

Once the broker is selected, opening an account requires:

• An online registration with your personal information
• An identity verification (identity card, proof of address)
• An initial deposit according to the broker's requirements (often between SGD 150 and SGD 750)

Certain brokers offer a demo account to practice without risk before trading with real money.

3. Choose an asset to trade

CFD brokers offer a wide range of financial instruments to speculate on. Popular assets among Singaporean traders include:

• Stocks (Tesla, Apple, DBS, Singtel)
• Indices (Straits Times Index, S&P 500, Nikkei 225)
• Forex (USD/SGD, EUR/USD, USD/JPY)
• Commodities (Gold, Brent Crude, Natural Gas)
• Cryptocurrencies (Bitcoin, Ethereum, Solana)

Pick an asset that fits your trading strategy, risk tolerance, and market knowledge.

4. Analyze the market and take a position

Before opening a position, analyze the market with:

• Technical analysis: indicators (RSI, MACD, moving averages) and chart patterns
• Fundamental analysis: economic news, company results, central bank decisions

Next, you can open a position:

• Buy (Long): if you think the price will go up
• Sell (Short): if you anticipate a decrease

5. Defining Your Leverage and Protective Orders

Leverage allows you to increase your market exposure with a smaller investment. However, it also magnifies potential losses. In Singapore, MAS sets leverage limits for retail traders, such as:

• 1:50 for major Forex pairs
• 1:20 for gold and major indices
• 1:5 for individual stocks
• 1:2 for cryptocurrencies

To manage your risk effectively, always use protective orders:

• Stop-loss: Automatically closes your trade if losses exceed a certain level
• Take-profit: Locks in profits when your target price is reached

6. Monitoring and Closing Your Position

Once your position is open, monitor its progress via the broker's platform. Depending on your strategy, you can:

• Manually close your position
• Let your take-profit or stop-loss execute automatically
• Adjust your orders based on the market

Attention!

Positions held open for multiple days may incur overnight fees (swap), which should be verified with your broker.

7. Analyze Your Performance and Optimize Your Strategy

After each trade, analyze your results to improve:

• Review what worked and what didn't
• Adapt your risk management and entry/exit strategies
• Use the broker's tools such as trading journals and market analysis

What are the fees of a CFD broker?

CFD brokers apply various fees that influence the profitability of trading. It is essential to understand these costs before opening an account. Here are the main types of fees, with concrete examples.

1. The spread

The spread is the difference between the buying price (Ask) and the selling price (Bid) of an asset. It is the main source of revenue for commission-free brokers.

CFD Spread Example

A broker offers a CFD on EUR/USD with a spread of 1.2 pips. If you open a position of 1 lot (100,000 units), the cost of the spread will be:

• 1 pip = $10 on a standard lot
• 1.2 pips = $12 fee to open the position

2. Commissions

Certain brokers charge fixed commissions in addition to the spread, especially on ECN/STP accounts, which offer tighter spreads.

Example of CFD commission

An ECN broker charges a commission of $7 per lot on a Forex trade. If you open a position of 1 lot on EUR/USD, you will pay $3.50 on opening and $3.50 on closing, for a total fee of $7.

3. Overnight fees (swap)

Overnight fees, also known as swaps, are charged when you keep a position open after the markets close (10 PM GMT). They are based on the central banks' interest rates.

Example of CFD swap fees

You hold a buy position on the CFD EUR/USD with a leverage of 1:30. Your broker applies a swap rate of -0.7 pips per day. If your position is 1 lot, you will pay $7 of overnight fees each night.

4. Inactivity fees

Brokers may charge inactivity fees if your account remains inactive for a certain period (usually 3 to 12 months).

Example of inactivity fees

A broker charges SGD 15 per month after 6 months without activity. If you do not trade for a year, you will pay SGD 90 in inactivity fees.

5. Deposit and Withdrawal Fees

Some brokers charge fees on bank transactions or withdrawals depending on the payment method used.

Example of deposit and withdrawal fees

A broker charges 1.5% on deposits by credit card and SGD 7 on each withdrawal by bank transfer. If you deposit SGD 1,500, you will pay SGD 22.50 in fees. If you withdraw SGD 750, you will pay an additional SGD 7.

6. Fees related to leverage

Leverage allows you to trade with more capital than is available in your account, but it can lead to financing fees.

Example of leverage fees

You open a position of 10,000 with a leverage of 1:50 (the maximum leverage allowed for retail traders in Singapore according on the regulation). Your broker applies a daily financing rate of 0.01% on the borrowed amount (9,667). Each day, you will pay approximately 0.97 in fees to maintain this position.

What strategy to trade with a CFD broker?

CFD trading allows for a variety of strategies depending on your experience level, investment horizon, and risk tolerance. Below is a summary of the most commonly used strategies by CFD traders in Singapore:

What is the taxation for income from CFDs in Singapore?

In Singapore, profits from CFD trading are generally not subject to capital gains tax. However, if CFD trading is classified as a professional activity, the profits may be treated as income and taxed accordingly.

1. Taxation of CFD Profits in Singapore

The Inland Revenue Authority of Singapore (IRAS) considers factors like the frequency of trades, holding periods, and intent to make a profit when determining if CFD trading qualifies as a business activity.

2. Offsetting Losses and Taxing Gains

If your trading is considered a professional activity, you may offset your CFD trading losses against your gains for tax calculation purposes.

Example:

If you made SGD 10,000 in gains and incurred SGD 4,000 in losses in the same year:

• Your taxable profit would be SGD 6,000 (if trading is considered a business activity).
• You would be taxed according to Singapore’s personal income tax rates.

If your CFD trading is considered personal investment, no tax or deduction applies.

3. Declaring CFD Profits to IRAS

• For investors: If CFD trading is occasional and not your main source of income, you do not need to declare your profits.
• For professional traders: If you trade CFDs as a business, declare your net trading profits in your annual income tax return under "Other Income" or "Trade Income".

P. Laurore

Finance expert

Co-founder of HelloSafe and holder of a Master's degree in finance, Pauline has recognised expertise in personal finance, which she uses to help users better understand and optimise their financial choices. At HelloSafe, Pauline plays a key role in designing clear, educational content on savings, investments and personal finance. Passionate about financial education, Pauline strives, with every piece of content she oversees, to provide reliable, transparent and unbiased information for independent and informed financial management. To this end, she has tested over 100 trading platforms to help internet users make the right choices.