Fineco offers Contracts for Difference (CFDs) on stocks, commodities, indices, and forex, all commission-free and with tight spreads on their trading platform.
CFDs are essentially a form of speculating on whether the value of an asset will rise or fall. In this way, it is possible to take advantage of volatile markets by trading CFDs.
However, it is important to note that CFD Trading on Fineco is very risky and it would therefore be prudent to ensure you understand how CFDs work.
See also: My full Fineco Review for more details
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.91% of retail investor accounts lose money due to CFD trading with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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CFD Trading on Fineco in 6 easy steps
- Open a Fineco trading account – Head to Fineco.com to open a trading account or download the app
- Deposit funds – using a credit/debit card or bank transfer
- Select the market and timeframe you wish to trade
- Decide whether you wish to buy or sell
- Set your limits and stops
- Place your first trade – remember, it’s often wise to start low and slow while you get to grips with the market.
Pros and cons of trading CFDs on Fineco
With every trading platform there are pros and cons to be aware of before signing up. Below I have detailed the pros and cons at Fineco so you can be sure that this is the trading platform for you.
Detailed steps on how to start CFD trading at Fineco
1. Open a Fineco account
This is a relatively easy step and can be completed in a few minutes.
- Click ‘Open Account’ on the website or download the Fineco app
- Enter your name, date of birth and residential address
- Complete information regarding citizenship, employment status and source of income
- Enter some basic questions about your trading experience
- Decide whether you would like a Fineco debit card
- Complete a bank transfer
- Upload a copy of your photo ID and accept the terms and conditions
2. Deposit funds
Use either a credit/debit card for instant deposits or a bank transfer for deposits that will be available after a few business days.
3. Select the market and timeframe you wish to trade.
You can choose between indices, stocks, futures on commodities CFDs, and futures on government bonds. You may also like to take advantage of the educational resources offered at Fineco including a live session to help you get to grips with the platform and scheduled webinars with various trading tips.
4. Decide whether you wish to buy or sell
You will need to study the markets to gain an idea of whether an asset’s price is likely to go up, in which case you would buy, or go down, in which case you would sell opening positions.
5. Set your limits and stops
Limits and stops offer effective means by which to manage your trades without constantly monitoring them yourself. Limits and stops can automatically close your trade for you once it has reached a parameter that you have set. This can help calculate your potential profits and reduce your exposure to risk.
Fineco provides the following limits and stops to aid your trading strategy:
- Stop (take profit and stop-loss)
- Trailing Stop
- Conditional orders
6. Place your first trade
Once you have opened your first trade, the onus will be on monitoring your position in real time in order to find the best possible moment to close your trade.
Your potential profit or loss can be calculated by multiplying the amount by which the market has moved, by the size of the trade that you opened.
Fineco CFDs Fees
There is no doubt that Fineco Bank has low CFD trading fees when compared to other brokers. I compared commissions and spreads so you can gain a clear picture of how Fineco stacks up.
|Commissions on UK Shares CFDs||£0||0.10% min £10||0.10% min £9||0.10% min £8|
|Commissions on USA Shares CFDs||£0||2 cents min £15||2 cents min $10||2 cents min $10|
|Commissions on USA Shares CFDs||£0||0.10% min 10 EUR||0.10% min 9 EUR||0.10% min 10/12 EUR|
|FTSE 100||0.6 pts||1 pt||1 pt||0.8 pts|
|Nasdaq 100||0.6 pts||1 pt||1 pt||1 pt|
|Dow Jones||1 pt||1.6 pts||1.6 pts||1.4 pts|
From this snapshot you can clearly see that Fineco are a very competitive option. With no trading fee, and only the spread to worry about, you can be sure you are getting excellent value at Fineco.
Alternatives to Fineco
One of the areas where Fineco really stand out from many of the other CFD trading platforms is the ability to trade and bank from the same account. This may come as huge advantage to some traders, however, if this is not something that entices you to the trading platform, then here are my top picks for an alternative for trading CFDs.
Fineco Bank vs Saxo Markets
Saxo is a good alternative online brokerage for trading CFDs. I found Saxo to have a wider range of tradable assets and a more comprehensive educational offering, however, they are a more expensive option.
|Fineco Bank||Saxo Bank|
|S&P 500 index CFD||$1.80*||$3.10*|
*This is the cost for a $2,000 20:1 position, held for 1 week including commissions, financing, and spread. This is intended as an example only. Fees are subject to change and can vary depending on the financial instruments you trade.
Fineco Bank vs IG
These two offerings were very similar, however, IG does not hold a banking licence, are a more expensive option for trading CFDs, and are not listed on a stock exchange. That being said, there was a greater selection of markets and products at IG.
|S&P 500 index CFD||$1.80*||$2.60*|
*This is the cost for a $2,000 20:1 position, held for 1 week including commissions, financing, and spread. This is intended as a guide only. Fees are subject to change and can vary depending on the financial instruments you trade.
My Summary on Trading CFDs on Fineco
There are several elements that make trading CFDs with Fineco easy to recommend.
The trading platform has been developed in-house and provides a powerhouse of advanced tools and functionality. Mobile trading is equally impressive, if not better, with a well-designed app that allows traders to utilise touch or face ID to confirm transactions and access their portfolio 24/7.
Sadly the desktop platform is only for professionals, however, with two excellent alternatives, this won’t be an issue for everyone.
Being listed on the Italian Stock Exchange and having a banking licence provides an additional layer of security and there is no denying that this is one of the most cost-effective solutions for online trading of CFDs.
The major drawback, in my opinion, is the lack of demo account for new traders. However, given that demo accounts are free on any trading platform, there is little to stop new traders from opening one elsewhere to practice on, and then heading across to Fineco to enjoy the low fees when they are ready.
CFDs are derivative financial instruments, meaning that their value, is anchored to that of the underlying asset. When trading CFDs, you never actually own the underlying asset but are speculating on whether the price of that asset will move up, or down. Small fluctuations in the value of the underlying asset can have a proportionately high impact on the margin and therefore impact a trader’s profit or loss significantly.
This is the reason CFDs are considered risky.
Frequently asked questions about Fineco CFDs
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