With CFD broker trading, you can profit through buying and selling ether without having to worry about keeping your cryptocurrency secure from hackers. We’ve found and reviewed all the best brokers.
Where can I find the best brokers to trade Ethereum?
Right here. We’ve compiled a list of the leading CFD brokers and reviewed them to help you find the right platform for you.
What is CFD trading?
CFD trading is a way of trading ether without having to be responsible for managing the coins or own them. CFD stands for Contract for Difference, but don’t worry it doesn’t involve sitting down and signing anything, it’s just an agreement with a CFD broker platform to pay you the difference in the prices of ether from when you bought the coins to the time you decide to cash out. Instead of owning the coins you are trading against their value – we’ll explain everything below.
How do Ethereum broker platforms work?
Broker platforms allow you to trade against the changes in the price of ether, without having to keep the coins in a wallet or worry about securing them from hackers. When you take out a CFD you are essentially ‘buying’ some ether at a certain price, with the understanding that when you sell the CFD you will get paid what the amount of ether you bought is worth at that point.
Here’s an example: if you buy a CFD for £5,000 worth of ether, and the value of ether rises 10%, the CFD can then be sold for £5,500, leaving you with a £500 profit. Conversely, if the price drops by 10%, the contract can only be sold for a loss of £500. However, you will be able to control when you sell the contract.
Additionally some CFD platforms allow you to trade cryptocurrency with leverage, meaning that for every rise or fall in the value of ether your contract either rises or falls in value by a multiple of that. To use the same example as above, if your CFD had leverage of 2:1 then it would be worth £6,000 or £4,000 after a rise or fall of £500 in the value of your ether.
If you’re worried about the word ‘contract’, don’t worry. Put simply, you are effectively trading over the change in the price of ether without having to deal with the hassle of needing to store it.
So I don’t technically own the ether I’m trading on a CFD platform?
Technically no, you don’t ‘own’ the ether. Instead, you ‘own’ the value of the ether you paid for, whether that value rises or falls – you’re entitled to it. This allows you to trade on the market fluctuations and act faster than you could if moving ether between wallets or exchanges.
What should I look for in an Ethereum platform?
A regulated platform
Ethereum CFD trading sites should be regulated, either by the FCA or similar regulatory body, so make sure you’re using a reputable and regulated site.
Variety of payment methods
CFD platforms offer different payment methods for you to make deposits and withdrawals with. As an example, some platforms accept PayPal payments, whilst others don’t.
Suitable deposit and withdrawal limits
Deposit and withdrawal limits will vary from platform to platform, so make sure you’re selecting a CFD platform that allows you to conduct the level of trading you would like to do.
Ethereum CFD trading has been around for a while now, so some platforms have been serving customers for long enough to have a strong reputation. Our reviews will provide you with a platform that’s trustworthy and reputable to use.
Design and ease of use
A CFD platform should be easy to use and navigate. You should be spending your time making money trading on ether, not figuring out how to navigate the site.
Variety of coins
If you’re interested in investing in cryptocurrencies other than Ethereum, have a look at CFD platforms that allow you to trade with a range of coins.
Will I have to verify my Ethereum trading account?
Yes. As CFD trading is a regulated industry, you will have to comply with regulations and must provide details for account verification. Verification will usually involve providing proof of identity and proof of address (through providing the relevant documents). You will often be asked to provide a selfie of yourself holding such documents to prove they’re yours.
Is CFD trading secure?
Yes, but this largely depends on the platform you use. If you’re using a reputable service then don’t worry – your trades will be secure. We’ve narrowed down the most reliable and reputable CFD platforms and reviewed them for you right here.
What if I forget my password?
Just like other online platforms, CFD trading platforms will have ways of allowing you to reset your password in the case you lose your password, using your email address, or recovery question(s).
Can I trade multiple cryptocurrencies with online brokers?
Yes, you can. You can easily buy or sell contracts involving multiple cryptocurrencies on broker platforms. Although most platforms offer the ability to take out contracts on Bitcoin, Ethereum, Ripple, and Litecoin, the full selection of cryptocurrencies offered will change between platforms.
Do CFD trading brokers charge fees for trades?
This depends on the platform. Usually, platforms do not charge trading-related fees, with the exception of overnight fees for keeping your trades open. However, most platforms charge withdrawal or deposit fees.
Do I need to have an Ethereum wallet to use a CFD broker?
No. You don’t need a wallet to use a CFD platform, as you don’t ever own the underlying ether that you are trading over. You are simply trading on the change in price position.
What are the advantages of using an online broker platform?
CFD brokers are the best tool for users looking to make money on the price fluctuations of ether; fast trading is what they are built for. It also removes the hassle of having to control or hold the ether yourself on a wallet, which takes time.
And what are the drawbacks?
If you want to own and use coins yourself, you’ll need to use an exchange. You will also need to have more technical financial knowledge in order to take full advantage of trading, as it might be difficult to appreciate how to operate a trading platform as an inexperienced user; so learning must come first.
Should I use an Ethereum broker to trade?
This depends on you. If you want to trade ether quickly and easily without having to worry about the storage of your ether, then CFD trading is a great option for you. If you’d prefer to spend your Ethereum and use it in your lifestyle then you need to use an exchange. Find more pros and cons below:
- Your concerns
Can I use a CFD broker on my mobile phone?
Yes, you can. Most CFD trading platforms have easy-to-use mobile apps available with all the same or similar functionality as the main website.
Is CFD trading the best way to buy and sell ether?
If you’re looking to trade ether without having to own the underlying asset, then CFD trading is a great option for you. You can focus on making quick trades, and opening long or short positions.
What are the differences between CFD platforms, exchanges, and brokerages?
This is explained fully on our page about buying bitcoin, so for detailed information it’s good to head there. But to give a quick summary: an exchange enables you to buy and trade a range of cryptocurrencies, an online marketplace. A CFD broker works the same as an exchange, however you to trade against the value of an asset without actually owning it.
Are there minimum and maximum deposit/withdrawal amounts?
Minimum deposits and withdrawals tend to be between £25 and £200. Maximum limits depend a lot on the platform and the payment method you are using, but it can be up to £10,000 per transaction. To get the highest withdrawal limits, it is recommended to deposit via bank transfer.
Are there trading limits?
The limits on singular trades depend entirely on the platform you’re using. See our reviews on each Ethereum broker for more accurate information.
Is it easy to switch broker platforms?
Yes. You can even use a number of Ethereum platforms at the same time if you so choose.