Compare CFDs and futures contracts — understand the differences in cost, leverage, and flexibility.
CFDs vs Futures: Core Differences Explained
Ownership & Structure
Neither CFDs nor futures give you ownership of the underlying asset. But there's a big difference in where they live.
CFDs are over-the-counter (OTC) — you’re dealing directly with the broker.
Futures? Exchange-traded, standardized, regulated. One is flexible, the other, formal.
Leverage & Margin
CFDs offer variable leverage, usually broker-defined. In many regions, ESMA limits retail leverage (e.g., 1:5 for equities).
Futures? Leverage is embedded in the contract, often higher — but requires more initial margin upfront.
Expiration & Rollovers
CFDs don’t expire unless you hold them indefinitely. You close when you want.
Futures come with fixed expiration dates. When that moment arrives? You either roll over or let the contract settle. Passive holding isn’t really an option.
Pricing & Fees
CFDs build costs into the spread — the gap between buy and sell. Simple, but sometimes opaque.
Futures use a bid-ask model + exchange fees + broker commission. You see more of what you're paying for, but it adds complexity.
Execution & Liquidity
Major futures contracts (like the S&P 500 or crude oil) are highly liquid — tight spreads, deep order books.
CFD liquidity depends on the broker and asset. Execution might be instant, but not always at market depth.
Accessibility & Lot Sizes
CFDs can be traded in small increments — even fractions of a lot.
Futures? Often come with minimum contract sizes that may be too large for smaller retail accounts. Not ideal for casual exposure.
Costs and Fees: CFDs vs Futures
How Fees Are Structured
CFDs usually fold their charges into the spread. You won’t always see a clear commission, but you’re paying it—it’s just built in.
Futures, on the other hand, have explicit fees: exchange fee + clearing fee + broker commission.
Spread Differences
CFD spreads are controlled by the broker and can widen during volatile periods—especially if liquidity drops.
With futures, spreads are driven by the open market. On liquid contracts (like S&P 500), they can be razor-thin. But again—volume matters.
Overnight vs Intraday Costs
Hold a CFD overnight and you’ll likely pay daily financing. It’s like interest on borrowed exposure.
Futures don’t charge financing the same way—but you might face variation margin calls if the market moves against you.
Quick Example
Say you want $100,000 of exposure:
• CFD (1:20 leverage) → Margin required: $5,000. Spread: 1 point. Overnight fee: ~0.02% daily.
• Futures (full contract) → Upfront margin: $12,000. Commission: $4.50 per side. No overnight fees, but margin risk remains.
Market Structure and Regulation
CFDs: Broker-Side and Off-Exchange
CFDs are traded over the counter (OTC), which means there’s no centralized exchange. The broker is the counterparty — when you open a position, you're trading directly with them.
It’s fast and flexible, yes, but you're relying on the broker to quote prices, execute fairly, and manage risk properly. Regulation? Depends on the jurisdiction — and the broker's license.
Futures: Centralized and Cleared
Futures operate through formal exchanges like CME or Eurex. Each trade is cleared through a central clearinghouse, which steps in to manage risk between parties.
This structure means greater standardization, more oversight, and clearer settlement procedures. It also means no surprises about who’s on the other side of your trade.
Pros and Cons of CFD Trading
Access and Flexibility
CFDs give you exposure to markets that aren’t always easy to reach. Global indices, commodities, small-cap stocks—even crypto. All under one roof. Add to that the ability to go long or short, and you’ve got a tool that reacts to the market, not just follows it.
Lower Barriers for Small Traders
You don’t need deep pockets to start. With fractional sizing and leverage, you can trade assets that would otherwise be out of reach. That’s especially helpful in small-cap names, where traditional brokers sometimes fall short.
Ongoing Costs Can Sneak Up
Hold a CFD overnight, and the fees begin to trickle in. They're not huge day to day, but over weeks? They add up. And you don’t always see them coming unless you check your statements closely.
Less Transparency, More Trust
CFDs are OTC instruments. That means pricing, execution quality, even spreads — these are managed by your broker. You’re not just trading the market — you’re also trusting the platform.
Pros and Cons of Futures Trading
Institutional-Level Transparency
Futures are traded on centralized exchanges. That means open order books, real-time volume, and regulated pricing. You see what others see. No hidden spreads, no behind-the-scenes quoting.
Tight Spreads, Built for Hedging
Because liquidity is so deep — especially in contracts like oil, gold, or the S&P — spreads are razor-thin. That’s a huge plus for anyone managing risk or running short-term strategies.
High Capital Threshold
Here’s the blocker: minimum contract sizes and margin requirements can be steep. No micro-trading here. You need serious capital to trade comfortably — or you risk being stopped out too early. It’s not exactly retail-friendly out of the box.
Complexity and Commitment
With expirations, rollover management, and clearing obligations, futures demand attention. They’re not built for passive use. And unlike CFDs, they don’t offer fractional sizing. You’re all in, or you’re out.
CFDs vs Futures at a Glance
| Feature | CFDs |
|---|---|
| Ownership | No — just price speculation |
| Margin | Low — retail-friendly leverage |
| Expiration | No expiry — you close when you choose |
| Tax | Depends heavily on jurisdiction and structure |
| Regulation | OTC — broker governs most of the rules |
| Minimum Capital | Low — easy access even with smaller accounts |
| Futures | |
| Yes — contract gives legal rights to delivery (sort of) | |
| Medium to high — depends on the contract | |
| Yes — fixed date, rollover needed | |
| Also jurisdiction-specific, often more standardized | |
| Exchange-traded — centralized oversight | |
| High — not designed for micro-traders |