Offshore CFD Broker

Offshore CFD Brokers

Offshore CFD Broker Comparison Table
Online BrokerMinimum DepositTrading PlatformsMaximum LeverageCountry
$200MT4, MT5500:1Vanuatu (VFSC Regulated)
$10MT4, MT5, cTrader, R Trader2000:1Belize (IFSC Regulated)
$200MT4, MT5500:1Cayman Islands (CIMA Regulated)
$300MT4, ZTP500:1St. Vincent and the Grenadines

Offshore CFD Broker

A CFD is a Contract for Difference. A CFD lets the trader trade a market without owning it (the CFD has a value referenced to the value of the underlying market). The trader can go long (speculate on a rising market) or short (speculate on a falling market). With a CFD it is possible to use leverage, however increasing leverage increases risk.

An offshore CFD broker is one which provides CFD trading but is located in an offshore location. This does not necessarily mean that it is located on an island, but in general does. However some offshore brokers are not located on an island, for example one located in Belize. Effectively offshore means that the broker is not based within the area of a major regulatory body.

Because a broker is offshore does not necessarily mean it is unregulated. A number of brokers which are located offshore are regulated by the bodies within the country (whether on an island or not). However a broker may be located offshore and may be unregulated (even if the broker has a regulated branch in another country).

In general, offshore brokers allow a greater freedom in terms of features that a broker may offer, particularly pertaining to leverage and features such as bonuses. The trader can consider that bonuses and leverage have been restricted elsewhere for reasons of client protection and make an informed choice about whether to use these features. For example, the trader can trade with an offshore broker and use lower leverage. One way to use lower leverage is to use smaller trade sizes and some offshore brokers offer Cent accounts, which let the trader trade with trade sizes smaller then a Forex standard lot.

An issue with leverage is that it potentially lets the trader trade where each movement in the market is too large relative to the account size. With a smaller trade size (micro lots or smaller), the trader can more comfortably trade with smaller account size. This does means that the increments will be smaller if the trade moves in the trader's favour, but it needs to be considered that markets retrace and can be volatile, meaning that it possible for a market to move against the traded position, sometimes rapidly. Increasing leverage magnifies this effect in the traders account.

Thus a trader can think about what the effect of a trade on their account might be if the trade does what markets tend to do: retrace or become volatile. This may help make trading a more sustainable experience, giving room to the trader to learn about trading from trading in the market. Another way to practice trading is to use a demo account, which lets the trader trade without risking real money.

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