CFD Trading in 2022: things you should know



By Declan Yin // in Finance


Today, CFD trading is surging in 2022. Due to the fact that CFDs allow you to trade on financial instruments of any kind and even markets on a downtrend (in addition to all which are in an uptrend, of course), they became one of the most traded financial products on the net.

That is why words such as “online brokers” and “CFD bank” are among the most researched on the internet, with a general interest by common people on a rise for this kind of product. And still, there is much ignorance around the subject.

For this and other reasons we decided to start by the definition itself of CFD, and how they work, even before suggesting the best way to trade them.

Definition of CFDs

CFD trading means to buy and sell CFDs. “CFD” is an acronym which stands for “Contract for Difference”, a derivative financial product used worldwide to speculate on a variety of financial markets.

Among those markets and products we must remember:

  • Stocks
  • Shares
  • Indices
  • FX Pairs
  • Commodities
  • Cryptocurrencies

In order to trade them though, you must choose a proper brokerage service able to give you the right instruments to start trading.

Secure Ways to Trade CFDs

The first and most important thing is to choose a financial institute regulated by a recognised financial regulator.

For example, if you are a British citizen, you must rely on an FCA licensed brokerage service. But there are many recognised regulators around the world to take in consideration. They can easily be divided by area of influence:

Influence Area: Europe

  • BaFin – Bundesanstalt für Finanzdienstleistungsaufsicht (Germany)
  • BCSM – Central Bank of San Marino (San Marino)
  • CONSOB – Commissione Nazionale per le Società e la Borsa (Italy)
  • CYSEC – Cyprus Securities and Exchange Commission (Cyprus & European Union)
  • FCA – Financial Conduct Authority (United Kingdom)
  • FINMA – Swiss Financial Market Supervisory Authority (Switzerland)
  • GFSC – Gibraltar Financial Services Commission (Gibraltar)

Influence Area: Americas

  • BMA – Bermuda Monetary Authority (Bermuda)
  • CIMA – Cayman Islands Monetary Authority (Cayman Islands)
  • CSA – Canadian Securities Administrators (Canada)
  • FinCEN – Financial Crimes Enforcement Network (USA)
  • IIROC – Investment Industry Regulatory Organisation of Canada (Canada)
  • SEC – Securities & Exchange Commission (USA)

Influence Area – Asia & Oceania

  • ASIC – Australian Securities and Investments Commission (Australia)
  • FSC – Financial Services Commission (South Korea)
  • ISA – Israel Securities Authority (Israel)
  • JFSA – Financial Services Agency (Japan)
  • SEBI – Securities and Exchange Board of India (India)
  • SFC – Hong Kong Securities and Futures Commission (Hong Kong)

Remember to choose only a regulated broker or regulated CFD bank in your area before opening a trading account, otherwise you will mostly fall in a fraud or scam scheme.

Our Top Choice for the UK: FinecoBank

While you are certainly able to choose between one of the lists available on the internet for trading CFDs, we decided to choose a CFD provider which we think is the most suitable for UK citizens: FinecoBank.

FinecoBank is a regulated financial institute founded in the economic capital of Italy, Milan, in 1999. Born with a focus for online trading and the retail sector, they became a powerhouse in Europe and surged as one of the FTSE MIB companies in the Italian Stock Exchange. It goes without saying that being a blue chip company in the Italian Stock Market (the Borsa di Milano) makes them more than trustworthy.

On top of it, they also built the most used trading platform in Europe: Powerdesk. This desk trading platform made FinecoBank as the first bank in the continent for executing orders and it is a fully customisable platform for both entry level traders and pro-traders.

Finally, we must stress the fact that FinecoBank is a top-tier regulated bank in both licences from CONSOB and FCA.

About the author, Declan Yin

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