The 6 Best CFDs to Buy in Nigeria revealed. We have conducted comprehensive research to determine which Contracts for Difference (CFDs) provide Nigerians with the greatest opportunity in several marketplaces.
This is a complete guide to the 6 Best CFDs to Buy in Nigeria.
In this in-depth guide you’ll learn:
- Overview of CFD trading in Nigeria
- 6 Best CFDs to Buy in Nigeria
- How to choose the Right CFD Broker in Nigeria
- The Best CFD Brokers in Nigeria
Overview of CFD trading in Nigeria
Contract for difference (or “CFD”) trading refers to the purchasing and selling of certain derivative financial instruments. CFD trading is a common approach for novice investors to get exposure to the financial markets.
CFDs are a class of derivative products because they let investors speculate on financial markets like stocks, currencies, indexes, and commodities without purchasing such assets.
Instead, the difference in the asset’s price between when the contract is opened and when it is closed is exchanged.
6 Best CFDs to Buy in Nigeria
Energy CFDs
When there is a spike in energy use, such as during times of active growth, CFDs on energies become a popular alternative for short-term trading. Supply and demand on a worldwide scale establish market prices for a commodity.
Since the price of oil, sometimes known as “black gold,” is typically quoted in U.S. dollars (thus the name “Petrodollar”), a drop in the value of the dollar tends to drive up the price of this commodity.
Whether they choose to reduce or increase production, countries that produce oil have considerable influence on the market’s available supply and, by extension, its price.
Since natural gas is often discharged during the oil drilling process, and since they are typically produced by the same firms or countries, the historical study demonstrates a general link between NatGas, an alternative energy commodity to oil, and oil.
Trading Contracts for Difference (CFDs) on energy enables you to speculate on price fluctuation without needing to buy the underlying commodity. Traders either gain or lose money when prices rise and fall, depending on the direction in which they are going.
Commodity CFDs
Raw materials or basic agricultural goods are examples of commodities that may be traded on the open market. The commodity market has been around for quite some time and is substantial.
The exchange of commodities is one of the most liquid markets in the world, and market participants have simple access to significant trade volume and stable supply and demand conditions.
Commodity markets are characterized by a preponderance of power held by concentrated groupings of large corporations and by government regulation of these markets.
As a result, supply is strictly managed to limit price swings. Because of the unique nature of CFDs, the trader need not physically keep $100 worth of coffee beans somewhere to enter a CFD.
Commodity contracts for difference (CFDs) enable traders to speculate on the movement of commodity prices over short timeframes.
Apple Inc. (NASDAQ: AAPL)
Apple, Inc. is a well-known company that focuses on providing electronic products, computer programs, and internet services. Apple shares are listed on NASDAQ in the Global Select Market section of the exchange and trade under the symbol AAPL.
Apple stock continues to be a popular choice among dividend investors due to its high dividend yield and record of accomplishment of annual increases.
Apple still has around $145 billion in cash reserves and a free yearly cash flow of $54 billion, so it will be high on the ‘wish list’ of income-focused investors.
Cryptocurrency CFDs
Cryptocurrency contracts for difference (CFDs) provide investors exposure to cryptocurrency price fluctuations without having to purchase any cryptocurrency.
Individuals who want to profit from changes in cryptocurrency prices but who do not wish to deal with the technical aspects of purchasing and keeping cryptocurrencies find Cryptocurrency Contracts for Difference to be a convenient alternative.
Traders of crypto CFDs are not required to have an exchange account or a wallet to store their cryptocurrency assets.
Cryptocurrency contracts for difference (CFDs) may be traded instead via online brokerages such as Axi. Additionally, traders may purchase and sell crypto CFDs without worrying about breaking any crypto restrictions since crypto CFDs are fully regulated financial products.
Trading cryptocurrency CFDs has all the elements of a standard CFD, including the ability to leverage capital, trade with both long and short positions, and profit or lose based on the spread between the purchase and sale prices.
Furthermore, unlike futures contracts, cryptocurrency CFDs do not expire, so traders may establish positions without worrying about monthly penalties for rolling over contracts.
Leverage is a tool that allows investors to get a larger share of the cryptocurrency markets for a smaller initial investment. While margin trading enables traders to generate big returns on modest investments, it also magnifies their losses if things go wrong.
While bitcoin CFDs work similarly to conventional CFDs, traders should recognize that the cryptocurrency market is distinct. The cryptocurrency market is notoriously unpredictable, often defying established trading principles.
Traders should study the cryptocurrency they want to invest in thoroughly and devise a risk management approach that is consistent with their investment objectives before making any purchases.
Alphabet, Inc. (Google) Class A (NASDAQ: GOOGL)
Sergey Brin and Larry Page established Google on September 4, 1998. After 24 years, Google has become a worldwide powerhouse that employs more than 85,000 people throughout the globe and is consistently ranked among the world’s most valuable firms.
Search and advertising is two of Google’s many thriving income streams, both of which show year-over-year growth.
From its ownership of Android, Chrome, Google Maps, and YouTube to its control of business cloud services, digital content, and even certain hardware goods, Google has a wide range of internet items from which it generates money.
However, due to the high trading capital requirements associated with Alphabet Inc., trading the company is out of reach for many individual retail investors. However, most CFD brokers enable you to trade Google stocks as a contract for difference.
Without having to buy and hold Google equities, CFDs let you bet on the way the stock price will move. Instead of investing vast quantities of money in a limited number of companies, CFDs allow you to profit from stock price swings with a lower initial commitment.
Precious Metal CFDs
Investors could choose from a few different approaches when buying and selling gold. One way for people to directly invest in gold is via the purchase of gold bullion, which is a standardized unit of gold measurement that is often given a unique serial number.
Gold exchange-traded funds were another option for investors (ETFs). Investors may choose exchange-traded funds (ETFs) that contain real gold or ETFs that try to follow the price of gold via derivatives.
Alternatively, investors may get exposure to the gold market without holding any gold by purchasing gold derivatives such as gold CFDs.
By using leverage, CFDs provide investors with a larger return on their investment. For more exposure to the gold market, many investors turn to CFDs, or contracts for difference, a popular derivative that enables leveraged trading.
You do not purchase gold, but units in a financial instrument that tracks the price of gold and allows you to profit from changes in that price. Trading gold CFDs has several benefits, such as not having to deposit the whole amount of a transaction and being free from stamp duty.
However, traders must understand what influences the price of gold before engaging in CFD transactions on the metal since both your gains and losses in CFD trading might be magnified.
How to choose the Right CFD Broker in Nigeria
Traders could not have picked a more favorable time to enter the investment market than the present. Competition among online brokers is high, which means costs are dropping down and features are being boosted.
Those interested in trading global financial instruments could choose from a wide variety of online forex and CFD brokers. However, there are several factors to consider when choosing a broker and we will go through them here.
Commission Charges
Individual stocks, options, mutual funds, exchange-traded funds, and bonds are the main investment types offered by brokers. Some will also provide exposure to the forex market, futures trading, and cryptocurrency exchanges.
Both the suitability of the broker’s offerings to your investment requirements and the fees you must pay is dependent on the investments the broker has available. You should pay close attention to the commissions that are involved with the investments you like.
Overall Reliability
There is a diverse selection of brokers available. Several have been popular for many years, while others have just recently emerged.
That does not imply they cannot be trusted, but if they are managing transactions for clients, they are members of a self-regulatory organization like the Financial Industry Regulatory Authority (FINRA), the Financial Conduct Authority (FCA), and other regulators, or subject to additional oversight.
Account Fees
While it could be impossible to eliminate account fees, they may be kept to a minimum. To withdraw funds or investments, or to close your account, most brokers will assess a fee.
If a broker does not charge them, or if you do not use their optional services, you could avoid paying most additional costs.
Pricing and Execution on Trades
Cost is less of a factor today, leading to commission-free transactions becoming the norm at most brokerages.
However, you should consider the brokerage’s position on the controversial practice of paying for order flow and how much it costs before making a final decision.
This is especially true if you are an active trader who wants your deal completed at the best price possible, even if it means a difference of a few cents.
Additional Tools, Educational Materials, and Features
Look for a brokerage that provides free educational tools like live webinars, detailed how-to instructions, video tutorials, glossaries, and more if you are just starting in the investment world.
You should also look at the broker’s commitment to educating its customers about the inherent hazards of more complex trading tactics like options.
The Best CFD Brokers in Nigeria
In this article, we have listed the best brokers which offer CFD trading to traders. We have further identified the brokers that offer additional services and solutions to traders.
Best MetaTrader 4 / MT4 CFD Broker in Nigeria
Overall, IC Markets is the best MT4 CFD Broker in Nigeria. The MetaTrader platform from IC Markets provides a significant selection of third-party research and trading tool plugins.
Nigerians could execute high-frequency trading methods across well-known marketplaces because of IC Markets’ some of the finest real ECN execution.
Best MetaTrader 5 / MT5 CFD Broker in Nigeria
Overall, Tickmill is the best MetaTrader 5 CFD Broker in Nigeria. Tickmill offers Nigerian traders the choice between MetaTrader 4 and MetaTrader 5.
Tickmill is a CFD Broker for MetaTrader 5 that also provides access to other financial markets, minimal minimum deposits, and a variety of deposit and withdrawal options.
Best CFD Broker for beginners in Nigeria
Overall, IG is the best CFD Broker for beginners in Nigeria. For those just beginning their trading careers, IG offers a broad variety of tradeable markets and a wealth of educational resources. People who are new to trading may acquire new abilities using the free IG Academy program.
Best Low Minimum Deposit CFD Broker in Nigeria
Overall, TD Ameritrade is the best Low Minimum Deposit CFD Broker in Nigeria. With TD Ameritrade, Nigerian investors and traders may get started with trading for as little as 400 NGN.
Although there are restrictions on the amount of leverage you can use at TD Ameritrade, it still offers Nigerians a chance to profit while keeping their capital secure.
Best ECN CFD Broker in Nigeria
Overall, HFM is the best ECN CFD Broker in Nigeria. HFM offers Nigerians an NGN-denominated account that they can use to trade a range of CFDs, including Google and Apple shares, commodities, forex, metals, and more.
Best Islamic / Swap-Free CFD Broker in Nigeria
Overall, XM is the best Islamic / Swap-Free CFD Broker in Nigeria. Global broker XM works with all types of traders, including those who adhere to Sharia law.
XM provides an Islamic account with competitive trading conditions, access to more than 1,000 financial products, and other features.
Best CFD Trading App in Nigeria
Overall, AvaTrade is the best CFD trading app in Nigeria. AvaTradeGo is a proprietary mobile trading app that allows you to trade while you are on the go, and includes several innovative features that will give you an advantage in the FX market.
Best NGN Trading Account CFD Broker in Nigeria
Overall, Exness is the best NGN trading account CFD Broker in Nigeria. Zero-pip spreads are available from Exness, a low-risk broker, on popular currency pairings like EUR/USD.
Exness provides Nigerians unlimited access to NGN-denominated accounts, saving them from currency conversion fees.
Best Lowest Spread CFD Broker in Nigeria
Overall, FP Markets is the best lowest spread CFD Broker in Nigeria. FP Markets does not impose any spreads on the Raw Account or the Islamic Raw Account.
Additionally, FP Markets assesses minimal commission costs of $7 per round turn for these accounts.
Best Nasdaq 100 CFD Broker in Nigeria
Overall, BDSwiss is the best Nasdaq 100 CFD Broker. A NAS100 broker, BDSwiss has spreads that start at 0.01 pip and a 1% margin requirement. In addition, Nigerians do not have to pay a commission to trade on the Nasdaq.
Best NDD CFD Broker in Nigeria
Overall, Pepperstone is the best NDD CFD Broker in Nigeria. The large and well-known broker Pepperstone uses an STP model that allows transactions to process more quickly and effectively than other models.
Nigerians can also be certain that Pepperstone’s trading prices are reasonable and free of additional charges.
Best STP CFD Broker in Nigeria
Overall, FOREX.com is the best STP CFD Broker in Nigeria. For trading a wide range of CFDs across markets, more than 200,000 users utilize FOREX.com globally.
FOREX.com has an execution scorecard that guarantees that Nigerian traders can expect fast, reliable trade execution speeds.
Best Sign-up Bonus Broker in Nigeria
Overall, SuperForex is the best sign-up bonus broker in Nigeria. A Nigerian CFD trader could benefit from a few welcome incentives after opening a live trading account with SuperForex.
SuperForex is a highly accommodating broker with 11 trading accounts and a wide selection of markets.
Conclusion
While there is plenty to gain from CFD trading, there are also risks involved with using leverage. If you are a trader in Nigeria considering CFDs, you should only do so if your broker provides negative balance protection and you have a thorough risk management plan in place.
Frequently asked questions
Is CFD trading suitable for novices?
Yes, CFD trading is a popular instrument for novices due to the usage of leverage, which allows them to begin trading with a modest amount of cash.
How can you profit from CFDs?
Like when you trade the underlying asset, you profit from the difference between the starting and closing prices. With CFDs, however, you do not take delivery of the asset.
Can CFDs be held long-term?
Yes, it is possible to trade CFDs utilizing long-term methods that include buying and holding an asset.
Are CFDs safe?
CFDs are a tool for traders to benefit from the markets, but they carry a remarkably elevated level of risk. Traders must ensure that they have the appropriate risk management in place and only risk what they can afford to lose.
Can investing in CFDs result in a negative account balance?
Yes, your account may rapidly go negative while trading CFDs. Because of the leverage that traders and speculators may participate in while trading CFDs, it is possible to lose more money than the original margin deposit.
Top 4 Brokers
