With CFDs enable investors to act much cheaper than through a traditional brokerage firm.
It negotiates cheaper because there is no primary stock exchange tax payable on CFD brokers CFD and secondly because the low tariffs.
1. No fair tax on CFDs
The cost of a transaction is already over by the band a lot lower, but the obvious benefit is that no fair tax is due.
As explained on the page "What are CFDs?" transactions are actually using CFDs contracts between the investor and the brokerage firm, outside the stock opened and closed. On contracts, there is no 0.17% stock market tax due.
0.17% stock market tax is often the biggest cost for active traders. On a transaction amount of $ 10,000 makes this 17 euros per transaction. If you 10 times a day and get out, it will cost you 10 x 2 x 17 = 340 euros.
2. Low rates at CFD brokers
In Belgium there are 2 providers of CFDs. WH SelfInvest and Client Station Keytrade Bank. WH SelfInvest is clearly the cheapest provider of CFDs.
A few brief examples of the rates of WH SelfInvest.
CFDs on shares: 4.5 euros + 0,054% on the transaction amount.
In a transaction valued at $ 10,000 is 4.5 + 5.4 euro euro euro = 9.9 (no fair tax).
CFDs on indices: 3 euro
In a transaction valued at $ 10,000 or $ 100,000 on an index, you pay 3 euros flat.
CFDs are without doubt the cheapest way to actively trade in shares.
Below are a number of worked examples with detailed rate comparisons between WH SelfInvest, Keytrade and classic online broker BinckBank.
Example 1: a small trade with 400 shares of Heineken
Example 2: a large trade with 1,000 shares BASF
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