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Twelve things to look for when choosing a CFD provider in Asia

Many CFD providers in Asia offer CFDs on foreign exchange, indices, and commodities.

However, finding the best CFD provider for your needs can be difficult with many companies available. Here are 12 things you should consider when choosing a CFD provider in Asia:

CFD provider

Other services offered

Ensure the company is regulated by Singapore’s Monetary Authority (MAS). It ensures the company is financially sound enough to provide you with any financial service you may need. You can check if they’re registered online by checking here.

Reputation

The best place to look for reviews on CFD providers is online forums such as “Moneysmart” or “Lowyatforums”. If you want to make sure you have a reputable company, check out CFD trading at Saxo. It’s also worth checking the MAS website.

Minimum deposit criteria

Minimum deposits range from as low as SGD50 to over SGD10,000, and if you’re trading with smaller amounts, it may not be cost-efficient for you to open an account at some CFD providers. Some companies require either no minimum deposit (and withdrawal) or allow you to start trading without making a deposit (withdrawals are only allowed once the trader has deposited enough funds into their trading account).

Leverage ratio

A leverage ratio is the amount of money a CFD provider allows you to trade with. For example, a company may offer a 100:1 leverage ratio which means that for every SGD1 in your trading account, you’re allowed to control SGD100 worth of assets. It’s both good and bad – if the trader loses SGD50, it won’t have much impact on their trading account, but they could still lose more than their initial investment.

Spreads

CFDs are bought and sold through a bidding process called ‘the spread’. The spread is the difference between the price you can buy at (i.e., bid price) and sell (ask or offer). These spreads can be fixed or variable, but it’s best to choose one with a tight spread to minimize the amount of money spent on trading fees.

Minimum trade size

Minimum trade sizes will vary depending on the company chosen, ranging from as low as USD1 per lot (contract) or around 10,000 Yen for Japanese traders. It’s best to check the terms and conditions before opening an account with a CFD provider.

Leverage ratios offered

Some companies may offer leverage ratios of up to 500:1. For every SGD1 in your account, you’re allowed to control SGD500 worth of assets. Higher leverage ratios mean higher potential profits and lead to a higher risk of loss if the trader is not cautious with their trading funds.

Assets offered

When choosing a CFD provider, they must offer assets (underlying instruments) relevant to you and an asset list that is diverse enough so that the traders’ portfolios reflect the actual market performance.

Company policies

It’s essential to familiarise yourself with the company’s terms and conditions to ensure that you’re aware of any fees involved in trading, minimum trade size, minimum deposit criteria, minimum leverage ratios offered, etc.

Customer service

Customer service is essential when choosing a CFD provider since you will likely have questions about various features. Some providers offer 24/7 customer support via telephone/email/chat, while others may only provide help during specific times (or not at all). Make sure to check out this aspect before opening an account.

Deposit and withdrawal options

It’s essential to check which deposit/withdrawal methods are available for you, whether credit card or bank transfer (internet banking), and how much money will be required as a processing fee. Look for a company that offers low prices and processes withdrawals quickly.

Ease of use

Finally, you want to find a CFD provider that is easy to navigate: signing up should be simple, you should be able to use their trading platform without hassle, and there shouldn’t be any complexities involved in making trades, such as having to click through numerous pages to place an order.

Johnny J. Hernandez
Zombie aficionado. Beer practitioner. Coffee geek. Total alcohol maven. Freelance reader. Spent the better part of the 90's creating marketing channels for trumpets in Jacksonville, FL. Spent a weekend working on chess sets in Mexico. Spent a weekend creating marketing channels for Magic 8-Balls in Hanford, CA. Spoke at an international conference about developing inflatable dolls in Las Vegas, NV. Had some great experience importing muffins in the UK. Had a brief career getting my feet wet with crayon art in Pensacola, FL.