What are the best CFD brokers in Canada?

What is a CFD or Contract for Difference?

The term CFD is short for Contract For Difference. In English, this means contract on the difference.

A CFD is thus a financial instrument in the category of derivative products. 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 bonds or crypto-currencies.

One of the particularities of CFDs is that they allow speculation on both the rise and fall of the price 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 fluctuations 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 such as 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:

• Access to markets: 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 (difference between the buying and selling price), commissions, or financing fees for positions held open overnight.
• Regulation: In Canada, CFD brokers must be registered with the relevant Canadian regulatory bodies and comply with Canadian regulations regarding investor protection and leverage limitations.

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 market access.

What regulation and safety measures apply to CFD brokers in Canada?

In Canada, CFD brokers must be regulated by the Canadian Investment Regulatory Organization (CIRO), which is the national self-regulatory body overseeing investment dealers and trading activity. CIRO is supported by the Canadian Securities Administrators (CSA), a coordinating body for provincial and territorial regulators. These institutions ensure that Canadian investors are protected and that brokers operate under strict financial and ethical standards.

Trusted regulatory authorities for Canadian traders

Key safety rules imposed by CIRO on CFD brokers : 

CIRO imposes several important requirements to protect retail traders and ensure responsible CFD trading in Canada:

• Client fund segregation: Brokers must keep client funds in separate accounts from their own operating capital.
• Margin and leverage controls: CIRO sets strict margin requirements to limit client exposure and reduce risks of overleveraging.
• CIPF protection: Clients are protected by the Canadian Investor Protection Fund (CIPF) in case the broker becomes insolvent.
• Transparent disclosures: Brokers must clearly disclose all fees, charges, and associated risks related to CFD trading.
• Mandatory audits and compliance checks: Regulated brokers are subject to regular financial audits and regulatory inspections.
• Risk warnings: Brokers must provide clear and visible risk disclosures to inform traders of the volatility and potential losses involved in CFD trading.

These rules help ensure that CFD trading in Canada remains safe, transparent, and fair for retail investors.

How to choose a CFD broker?

Choosing a CFD broker is a crucial step for any trader looking to speculate on the financial markets. Several key factors should be considered to ensure the broker suits your trading profile and complies with current regulatory 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 via CFDs:

2. Regulation of CFD brokers

Regulation is one of the most important criteria when selecting a reliable and secure CFD broker. In Canada, brokers must be regulated by CIRO (Canadian Investment Regulatory Organization), which imposes strict compliance and client protection rules. However, many Canadian traders also choose international brokers regulated by other reputable authorities.Here are the main regulatory bodies to consider:

Warning

Be cautious with brokers that are unregulated or registered in offshore jurisdictions (e.g., Belize, Vanuatu), as they offer little to no investor protection.

3. Leverage in Canada and Elsewhere

Leverage allows traders to amplify their market exposure with a smaller amount of capital. While it can increase profits, it also significantly raises the risk of large losses.In Canada, CIRO-regulated brokers impose conservative margin requirements. The maximum leverage is typically lower than what is available from offshore brokers. Here is an overview:

Professional traders may request higher leverage by waiving certain retail protections. However, this comes with increased risks and usually removes safeguards like negative balance protection.

4. Available Order Types

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

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 API for algorithmic trading.
• Customer Service: assistance in French, 24/7 support via chat, phone or email.

Which CFD Broker is Best for a Beginner Canadian Trader?

Choosing a CFD broker when you're new to trading can be challenging. Here are the key criteria to help beginner Canadian traders select the right broker:

• Simple and intuitive platform: Choose a broker with a clear and user-friendly interface, such as eToro or XTB. MetaTrader 4 (MT4) is also a popular choice, though slightly more technical. It’s highly recommended to test a demo account before trading with real money.
• Regulation and security: A reliable broker should be regulated by the appropriate Canadian authority (CIRO) or another well-recognized international regulator. They must offer negative balance protection and segregated client funds. Avoid offshore brokers (e.g., in Belize or Vanuatu), which do not offer proper investor protection.
• Transparent and competitive fees: Compare spreads (the difference between buy and sell prices), commissions (some brokers offer commission-free trading on stocks/ETFs), overnight fees (swaps), and deposit/withdrawal charges. Look for brokers with tight spreads and free withdrawals.
• Customer support in French: Check if the broker provides French-speaking support via chat, email, or phone, along with a detailed FAQ. 24/5 or 24/7 support is a major advantage for new traders.
• Educational resources and training: A good beginner-friendly broker should offer video tutorials, webinars, and trading guides. A free and unlimited demo account is essential for practicing risk-free before going live.

How to Trade CFDs with an Online Broker?

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

1. Choose a regulated CFD broker

Before you start trading, it is essential to select a regulated and secure online broker. In Canada, make sure the broker is authorized by CIRO (Canadian Investment Regulatory Organization). Some international brokers regulated by authorities like the FCA (UK), CySEC (Cyprus), or ASIC (Australia) are also accessible to Canadian residents and follow high standards of investor protection.Look for a broker that offers:

• A user-friendly trading platform (such as MetaTrader or a proprietary platform),
• Competitive spreads and fees,
• Reliable customer support (ideally available in English and French).

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 $100 and $500 CAD)

Certain brokers offer a demo account to practice risk-free before switching to a real account.

3. Choose an asset to trade

CFD brokers offer a wide range of markets, allowing traders to speculate on price movements without owning the underlying asset. Popular CFD assets among Canadian traders include:

• Stocks (e.g., Tesla, Apple, Shopify, RBC)
• Indices (e.g., S&P/TSX 60, Nasdaq 100, DAX 40)
• Forex (e.g., USD/CAD, EUR/USD, GBP/USD)
• Commodities (e.g., Gold, Crude Oil, Natural Gas)
• Cryptocurrencies (e.g., Bitcoin, Ethereum, Litecoin)

Choose assets that match your trading strategy and risk tolerance.

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:

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

5. Set your Leverage and Protective Orders

Leverage increases your market exposure with a smaller capital requirement but also raises the risk of losses. In Canada, CIRO-regulated brokers apply conservative leverage limits:

• 1:30 for major Forex pairs
• 1:20 for gold and major indices
• 1:5 for individual stocks
• 1:2 for cryptocurrencies

To manage risk effectively, always use protective orders:

• Stop-loss: automatically closes a position if losses exceed a defined threshold.
• Take-profit: locks in profits when the price reaches a target level.

These tools are essential for disciplined and secure CFD trading.

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:

• Close your position manually
• Let your take-profit or stop-loss execute automatically
• Adjust your orders according to the market

Attention!

Positions held open for several days may incur overnight fees (swap), to be verified with your broker.

7. Analyze Your Performance and Optimize Your Strategy

After each trade, analyze your results to improve:

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

What are the fees of a CFD broker?

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

1. The spread

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

Example of CFD spread

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 upon opening the position

2. Commissions

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

Example of CFD commission

An ECN broker applies a commission of $7 per lot on a Forex trade. If you open a 1 lot position on the EUR/USD, you will pay $3.50 on opening and $3.50 on closing, i.e. $7 in fees in total.

3. Overnight fees (swap)

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

Example of CFD swap fees

You hold a buy position on the EUR/USD CFD 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 in 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 $10 CAD per month after 6 months of inactivity. If you don't trade for a year, you will pay $60 CAD 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 $5 CAD on each withdrawal by bank transfer. If you deposit $1,000 CAD, you will pay $15 CAD in fees. If you withdraw $500 CAD, you will pay an additional $5 CAD.

6. Leverage Fees

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

Example of Leverage Fees

You open a position of $10,000 CAD with leverage of 1:30. Your broker applies a daily financing rate of 0.01% on the borrowed amount ($9,667 CAD). Each day, you will pay approximately $0.97 CAD in fees to maintain this position.

What strategy to trade with a CFD broker?

CFD trading allows for a wide variety of strategies, depending on your experience level, investment horizon, and risk appetite. Below is a summary of the most commonly used CFD trading strategies, adapted for Canadian traders.

What is the taxation for CFD income in Canada?

What is the tax treatment of CFD earnings in Canada?

In Canada, profits earned from Contracts for Difference (CFDs) are considered taxable income. It’s important to understand how these earnings are classified and reported to avoid issues with the Canada Revenue Agency (CRA) and to optimize your tax situation.

1. Tax regime for CFDs in Canada

CFD profits can be taxed in two different ways in Canada, depending on how you trade: as capital gains or as business income. The CRA determines this based on the frequency of trades, your intent, and how organized your trading activity is.

*Marginal tax rates in Canada vary depending on your income bracket and province of residence.

2. Offsetting losses and calculating tax on gains

The amount of tax you owe depends on your net gain or loss during the year.

• If taxed as capital gains: You can offset your capital losses against capital gains from the same year. If your losses exceed gains, you may carry them back 3 years or forward indefinitely to offset future capital gains.
• If taxed as business income: Business losses can be deducted against other types of income, reducing your total taxable income.

Example

You make $10,000 in profits and incur $4,000 in losses during the same year.

• If you're taxed under capital gains rules, your net gain is $6,000. Only 50% is taxable, so you'll be taxed on $3,000.
• If you're taxed as business income, the full net gain of $6,000 is added to your total income for the year and taxed at your full marginal rate.

3. Declaring CFD income to the CRA

CFD earnings must be included in your annual tax return to the Canada Revenue Agency (CRA). How you report them depends on the tax classification:

• Capital gains should be reported on Schedule 3 – Capital Gains (or Losses).
• Business income should be declared as part of your self-employment or other income using Form T2125 – Statement of Business or Professional Activities.

Filing deadline: April 30th for most individuals, or June 15th if you're self-employed (but taxes owed are still due by April 30th).

Important

If you trade with a broker based outside of Canada, you may be required to disclose the foreign account using Form T1135 – Foreign Income Verification Statement, even if no income was earned. Failing to do so can result in significant penalties.

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.