Last Updated on 21 September, 2020 by Samuelsson

 

We have already taught you what online brokers consist of and which are the best according to our studies, but in this opportunity we will talk about a particular group: CFD investment brokers. Whether you’re a novice investor or have experience in the business, this type of investment will give you the opportunity to make money without investing large sums.

As we know that taking the first step to register ing an online broker and start trading can be difficult, we have prepared for you a very complete review where, in addition to showing you the best CFD investment brokers in Spain, we discuss all the factors that will help you recognize a reliable company and differentiate it from a fraudulent one.

First of all, if what you are looking for is a list of the most reliable brokers that offer this investment mode, we invite you to take a look at the following options:

NOTE! THIS ARTICLE IS TEMPORARY 

1. 24Option

broker-cfd-24optionIt is the quintessential online trading broker. In addition to investing in CFDs, you can also invest in the forex market. This portal is ideal if you are not used to investing online as its website is very simple to use. 24Option operates under a Beliciana firm that has the legal permissions to exercise its services in Spain, so you should not worry about scams.

2. IQ Option
broker-cfd-iqoptionOne of the most hedging online brokers today. Preferred by thousands of users in Europe, this online investment platform quickly became one of the most used for its variety of assets and currencies. Thanks to its financial system search system, you can find the investment style that best suits what you need. There is no doubt that at IQ Option, selling and buying financial instruments in Spain has never been easier.

3. Plus500
broker-cfd-plus500If you are looking for a secure platform, that is easy to use and where you receive support 24 hours a day, 7 days a week, Plus500 is the online broker you’ve been waiting for. You will be able to trade CFDs on stocks, Forex, indices and cryptocurrencies. Registering on this portal means starting to be part of one of the most reliable and innovative investment and business systems on the market.

4. Markets.com
broker-cfd-marketsIf you open an account in Markets.com, you can trade stocks, indices, cryptocurrencies and commodities on a completely reliable CFD trading portal. Don’t miss the opportunity to invest in more than 2,200 assets, manage effective quantitative analysis tools and big data, tight spreads and very low commissions. All this in a regulated environment and with high standards of privacy and security.

5. eToro
broker-cfd-etoroeToro invites you to invest confidently in its leading social trading system around the world. An online CFD trading broker that allows you to trade short and long term on major stocks and ETFs. One of the most outstanding features of etoro is its social investment revolution platform, where you can connect and discuss strategies with other investors using CopyTrader technology.

6. BDSwiss
broker-cfd-bdswissIf you create a BDSwiss account, you will join a group of over one million traders trading CFDs on stocks, commodities, Forex, indices and cryptocurrencies. If you don’t have much experience, BDSwiss customer service offers 24/7 support. The broker also has educational resources to help you stay informed about constant business changes, such as live seminars.

7. AvaTrade
broker-cfd-avatradeAvaTrade is an excellent alternative for those investors who want to settle in a professional and organized portal, which has a wide catalog of markets. In addition to being one of the few that offers a welcome bonus to its new users, this Irish company has a very complete mobile application for you to take control of your investments wherever you are. As if all this were not enough, you will also have the option to open a demo account.

Warning: Trades performed on online brokers with CFDs bring risks that can compromise the money of your investment. Please keep this in mind when starting a business on any of these investment platforms.

What is a CFD Contract?

CFD comes from Contract for Difference, which in Spanish means Contract for Difference. As indicated by this title, a contract for differences consists of the two parties to a business agreeing to exchange the difference between the input value and the exit value of an asset on which the contract has been made. One important thing to take into account when using this type of investment is that with CFDs the asset is not bought or sold, it is simply invested based on the direction that the asset can take in terms of its price in the market.

In other words, what will really determine the success or failure of your CFD investment is the variation (up or down) of the asset in question. This means that the return or risk of a CFD investment depends directly on how volatile the asset is in the market where the investment is being carried out. If you think the value of an asset can increase, then when you open a CFD your gain will be proportional to the appreciation of the asset price from the time the contract was opened until the contract is completed. If you think the asset value will fall, then the profit will depend on the depreciation of the asset’s value. In the event that the asset value is tilted in the opposite direction, the result will be a loss proportional to the difference in the asset value. Let’s look at an example:

Let’s say that a CFD on the IBEX-35 has a value of 9,000 euros. If you then sell it for 9,500 euros, you will have made a profit of 500 euros without having to block the initial share price of the IBEX-35. Thanks to this type of investment you will have a guarantee that ranges from 10%, a return percentage of 100% and a variation of the asset of only 10%.

Why choose to invest in CFD brokers?
broker-cfd-advantagesAs we have already mentioned, investments always carry a risk. However, in this section we will focus on all the advantages of investing in CFDs. One of the most positive features of this modality is that you can get significant sums of money having made a small investment. You’ll be able to count on high capital values because it’s a leveraged financial product. Another advantage of investing in a CFD broker is that you can choose to position yourself on high or low, which means you can take advantage of both when the value of the asset increases, and when it goes down.

As it is a speculative investment instrument, CFDs do not have an expiration date, which gives them undisputed appeal when compared to other futures products. They are also a very effective tool for determining risks through hedging strategies about the price of traditional assets putting a very small amount at stake. Here’s why it’s a good idea to invest in CFD brokers:

 

1. Diversification

The possibility of achieving a positive return whether the asset price rises or falls. This feature will allow you to better analyze the behavior of the asset and make your investment based on your chances of leaning up or down the market.

 

2. Leverage

This point basically means that you can negotiate with more money than you actually have, but this can be taken as a double-edged weapon. The reason is simple: In CFDs you can multiply your possible profitability, but at the same time the potential loss. For this reason, you have to handle it with care as both gains and losses can be much greater than the amount that was actually invested.

 

3. Flexibility

As already mentioned, CFDs do not have an expiration date as such, so you can choose to close your contract at the time that suits you best, as long as there is a counterpart in the market. This is arguably the most remarkable advantage over other products such as future ones.

 

4. Liquidity

CFDs have high liquidity, which means that managing position opening and closing orders is much faster and it is also much easier to get a counterparty. This applies to CFDs on currency pairs, stocks with a large trading margin and stock indices.

 

5. Accessibility

This may be perhaps the main reason for the popularity of CFD trading. Thanks to leverage, this investment system is actually accessible to traders who have basic starting capital, making it one of the tools of most commonly used investments in online brokers.

In conclusion, all those who decide to trade their investments in CFD brokers will be able to choose from the main commodities, indices, foreign exchange crosses and shares of companies with greater control and investing a very low initial capital, so it will always be one of the best options for low- or medium-earned investors.

 

How to invest in a CFD broker

broker-cfd-like-investingThe first step if you’re going to start online investments is to choose an online broker that really has the guarantees and licenses to earn your trust and be able to deposit your money without taking risks. Do not forget that at the beginning of the review we have left you what, in our opinion, are the most reliable CFD brokers in Spain.

Once you’ve made your decision, it’s time to understand very well how this financial instrument works and how to invest in a CFD broker. Let’s give an example:

Let’s say you’re investing $1,000 in a Coca-Cola stock. If the company’s shares are trading at 10 euros, you could originally buy 100 shares with your 1,000 euros. However, CFDs allow you to buy many more shares thanks to their leverage system.

If the broker you’re investing asks for a 10% guarantee, it means that with the $1,000 of your investment you’d be buying contracts for 10,000 euros. This means that by investing 100 euros you can move the initial 1,000 and keep 900 euros in liquidity, either to invest them in other businesses or have them available for anything.

Keep in mind that the guarantee will depend on the broker and the amount of assets you want to invest in.

Disadvantages of investing in CFDs

One of the most noticeable disadvantages of this financial instrument is that, just as you can make money from a small investment, you can also lose everything with the slightest change. Following the example above, if Coca-Cola shares move 10% in the opposite direction to your position, you will lose all your investment. The big difference between CFDs and traditional stock investments is that in the second case the shares would have to fall from 10 to 0 euros to lose all your investment, while with CFDs you only need to go down from 10 to 9 o to ruin your business. As the companies that manage online brokers are aware that this is a very significant risk, they give users the possibility to set a loss limit in exchange for a commission. This way, your position will close automatically if you reach your loss limit, however, not all investment portals have this system and some may even accumulate your debts and ask you to disburse the total.

For all this, we recommend that you inform yourself very well about how the online broker operates where you are registered and if it is possible to set a loss limit to ensure that you do not lose the money you do not have. That said, and investing smartly and securely, you can take advantage of all the advantages and benefits of CFDs mentioned above.

How to tell if a CFD broker is reliable
broker-cfd-seguridadLovaloramos.com focuses on unmasking fraudulent companies or suspicious sites, which is why below we will show you how to determine if a CFD broker is a scam or is on the contrary a legit site. First of all, we suggest you check our list of online brokers, as they have all passed the test and are safe and licensed companies. If, on the other hand, you decide to invest in another portal, we ask that you consider the following:

1. Regulations:

It is completely natural for a person to feel suspicious when depositing money on a website for the first time, which is why the best online brokers will indicate at first sight the regulations they have to operate legally. In Spain, it is best that the company is registered with the CNMW (National Securities Market Commission) and you can invest your money more peacefully.

2. Contact and Address Data

If a company exposes a physical address for complaints and contact details, it’s a good sign. A portal that is not working legally or where they just want to scam you will not take the trouble to enter an address, as they do not plan to address your concerns. If you want to corroborate the company’s veracity, it’s not a bad idea to get in touch or visit your physical headquarters before you start investing.

3. Security and Data Protection

If an online broker meets the above two points, it may also comply with it. A data encryption system and measures that protect user information are key factors in deciding to sign up for an investment portal. It is of no use to create an account in an online broker with a great offer if when entering your financial data there may be a risk that the information will fall into the hands of third parties.

4. Terms and Conditions

A secure online broker will put its terms and conditions of use in sight, and it will be on your side to keep an eye on them before you start investing. In addition to the general conditions, if the portal has any promotions, it will also have a number of rules that you must respect. In that case, we recommend reading them very well if you plan to sign up and then not have problems with withdrawing the money.

5. Payment Methods

A reliable portal will provide you with only the most reliable payment methods at the moment, as most of these companies have their internal conditions and require an identity verification process in order to withdraw money. Review the payment method catalog before signing up to make sure your trust method is available.

6. Customer Service

A customer service that works 24 hours a day or has multiple means of contact is a good sign and inspires confidence, as a fraudulent company would not take the trouble to address the concerns or complaints of its users if it intends to steal them from al in a way. An email, phone number or live chat are effective means of solving a problem or clarifying doubts.

With these six aspects in mind, you can reduce the risk of engaging with a suspicious company. We advise you to take into account everything described in this section to make you feel more confident and prepared when choosing a broker CFDs.

Other suggestions for choosing a broker CFDs

At this point where you already know what a BROKER IS, how they work and what things indicate that it is a safe company, we only have to talk about the variety of assets in which you can invest and give some latest suggestions to take advantage of your investment.

As you know, CFD brokers greatly expand our options for investing, which you couldn’t if we did it the traditional way in commercial banks. That is why we think that analyzing the asset offering of an online broker will help you make a decision, because after checking that it is not a scam, we would be able to examine the different options in which you can invest and make your business.

As we know that investing in the Spanish stock exchange is possibly not a specialty, because this can be done from any bank or by hiring some investment service, on the web there are many different options such as:

Commodities: precious metals such as gold, silver, platinum and copper. Energies such as oil trading, natural gas and heating fuel. Basic agricultural products such as maize, sugar, coffee, cocoa, wheat and cotton.
Stock Indices: IBEX 35, DAX 30, CAC 40, SP 500, NIFTY 50, among others.
Shares: In a large number of companies such as Netflix, Coca-Cola, Santander, Mastercard, Apple, BBVA, and many more.
Finally, once you’ve studied the offer, notice that not all assets belong to the same sector. If you can diversify the offer, much better for you. In addition to the basic sectors, it wouldn’t be bad if the online broker allows you to invest in the pharmaceutical industry where sometimes there are very attractive opportunities.

Remember that if you are looking to invest in currencies we also have an analysis of the best online forex brokers that you should not miss, so that you know much more about this form of investment very popular today and all its profits.

Conclusion

lovaloramos.com-valuation-endInvesting in a broker CFDs certainly brings many advantages for those who want to trade with an average/low balance, however, it does not have to be done recklessly. The possibility of achieving positive returns is proportional to the risk probabilities if you invest in a system that works with leverage.

In addition to this, unfortunately there are many portals on the web that take advantage of the popularity of these investment techniques and the innocence of some users to scam them and make them go through a bad experience. In order to avoid this as much as possible, our team in lovaloramos.com puts at your fingertips a list of licensed, safe and responsible portals, where your investment will be safe and managed by professionals.

 

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