Derivatives such as CFDs, spread bets, futures and options let you trade on the price of an asset without owning it. Most come with leverage, which multiplies both gains and losses. Used well, they can help you hedge a portfolio or speculate on short-term moves in shares, indices, currencies and commodities.
Choosing a derivatives broker in the UK comes down to three things: which products you can trade, what you pay and whether the broker is authorised by the Financial Conduct Authority (FCA). We compared five FCA-authorised brokers on these points, using the fees and terms on their UK websites in October 2026.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 52% and 76% of retail investor accounts lose money when trading CFDs with the providers in this article. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Best derivatives brokers in the UK
| Broker | Derivatives for UK clients | Minimum deposit | Retail CFD accounts losing money |
| Interactive Brokers | Options, futures and CFDs | £0 | 58.9% |
| Pepperstone | Spread bets and CFDs | £10 | 73.6% |
| XTB | CFDs | £0 | 74% |
| Plus500 | CFDs, including options CFDs | Varies by payment method | 76% |
| eToro | CFDs | $50 | 52% |
Sources: Interactive Brokers, Pepperstone, XTB, Plus500 and eToro, October 2026.
Crypto derivatives are not available to UK retail clients. The FCA banned the sale of crypto CFDs, futures and options to retail investors in January 2021, and the ban remains in place. If a platform offers you crypto derivatives as a UK retail client, treat it as a red flag.
Types of derivatives you can trade in the UK
Not every broker offers every product. This is what each type means for a UK investor:
- CFDs (contracts for difference): you agree to exchange the difference in an asset’s price between opening and closing the trade. Profits are subject to Capital Gains Tax, and losses can be offset against gains.
- Spread bets: you bet an amount per point of price movement. They work much like CFDs, but in the UK profits from spread betting are currently free of Capital Gains Tax and stamp duty. Losses cannot be offset.
- Futures: exchange-traded contracts to buy or sell an asset at a set price on a future date. Each contract has a fixed size, which is often large for a private investor.
- Options: exchange-traded contracts that give you the right, but not the obligation, to buy or sell an asset at a set price. If you buy an option, the most you can lose is the premium you paid.
Tax treatment depends on your individual circumstances and may change.
For CFDs and spread bets, FCA rules protect retail clients in three ways. Leverage is capped between 30:1 on major currency pairs and 5:1 on individual shares. Your broker must close positions when your funds fall to 50% of the margin required. And negative balance protection means you can’t lose more than the money in your account.
Interactive Brokers: best for options and futures
Interactive Brokers in a nutshell
Interactive Brokers (IBKR) is the only broker on our list that gives UK clients exchange-traded options and futures, alongside CFDs. Founded in 1978, it gives access to markets around the world from one account. Interactive Brokers (U.K.) Limited is authorised and regulated by the FCA, with reference number 208159.
IBKR charges a commission on every trade, which makes costs easy to compare:
| Product | Commission |
| UK index and stock options | £1.70 per contract (fixed) |
| US options | Up to $0.65 per contract, min. $1 per order |
| US futures | $0.85 per contract (fixed) |
| Share CFDs | 0.5 cents per US share, 0.05% on other shares |
Sources: IBKR options, futures and CFDs, October 2026. Exchange, clearing and regulatory fees are charged separately.
IBKR offers more than 8,500 share CFDs. They include US ETFs, which UK investors can’t buy directly. Commissions on CFDs make IBKR more expensive for small, frequent trades, but cheaper than a spread for larger ones. The platform, Trader Workstation, has a steep learning curve for beginners.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 58.9% of retail investor accounts lose money when trading CFDs with IBKR. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Pepperstone: best for spread betting
74-89% of retail CFD accounts lose money.
Pepperstone in a nutshell
Pepperstone was founded in Australia in 2010 and has over 900,000 trading accounts worldwide. In the UK, Pepperstone Limited is authorised and regulated by the FCA, with reference number 684312.
UK clients can open a spread betting account or one of two CFD accounts, Standard and Razor. All three start from a £10 deposit. Spread bets carry no commission, since the cost is built into the spread. On the Razor account, forex trades at raw spreads from 0.0 points plus a commission from £2.25 per lot, per side. Share CFDs on UK and European shares cost from 0.1% per side.
Pepperstone suits traders who want a choice of platforms: TradingView, MetaTrader 4, MetaTrader 5, cTrader and its own web platform and app. Its range covers shares, indices, forex, commodities and ETFs.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73.6% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
XTB: best for low costs
80% of retail CFD account lose money.
XTB in a nutshell
XTB was founded in 2002, is listed on the Warsaw Stock Exchange and has more than 2.9 million clients. XTB Limited is authorised and regulated by the FCA, with reference number 522157.
XTB charges no commission on CFDs. Its costs are in the spread, plus a 0.5% conversion fee when a CFD is priced in a currency other than your account’s. There is no minimum deposit and withdrawals are free. The CFD range covers forex, indices and commodities.
In the same account you can also buy real stocks and ETFs, commission-free up to €100,000 of monthly turnover, and open a Stocks and Shares ISA. XTB charges £10 a month if you make no trade for 365 days.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs 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.
Plus500: best for a simple CFD platform
86% of retail CFD accounts lose money.
Plus500 in a nutshell
Plus500 was founded in 2008 and is listed on the London Stock Exchange. Plus500UK Ltd is authorised and regulated by the FCA, with reference number 509909.
Plus500 offers CFDs on indices, forex, commodities, shares, options and ETFs through its own platform, on the web and in an app. It charges no commission and no deposit or withdrawal fees. It earns mainly from the spread. Other costs include overnight funding on positions held past the cut-off time, a currency conversion fee of up to 0.7% on trades in another currency and a monthly inactivity fee if you don’t log in for three months.
A free demo account lets you test the platform before trading with real money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs 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.
eToro: best for social trading
76% of retail CFD accounts lose money.
eToro in a nutshell
eToro was founded in Israel in 2007 and is known for CopyTrader, which lets you copy the trades of other investors automatically. eToro (UK) Ltd is authorised and regulated by the FCA.
UK clients can trade CFDs on currencies, commodities, indices, shares and ETFs. The cost is in the spread, with overnight fees on leveraged positions. The account is held in US dollars, so pounds you deposit or withdraw are converted, and each withdrawal costs $5. The minimum first deposit in the UK is $50.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 52% of retail investor accounts lose money when trading CFDs 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.
How we chose these brokers
We looked at each broker’s UK website and compared:
- FCA authorisation of the UK entity
- Which derivatives UK retail clients can trade
- Trading and non-trading fees
- Minimum deposit and withdrawal costs
- The share of retail CFD accounts that lose money
All five brokers also let you buy other products, such as shares or ETFs, if you want to invest beyond derivatives.
What makes a good derivatives broker?
Authorisation by the FCA comes first. It means the broker must follow the leverage limits, margin close-out and negative balance protection rules for retail clients. You can check any firm on the FCA register.
Next, look at the full cost of a trade. Commission-free brokers earn from the spread, so compare spreads on the markets you trade. Add overnight fees if you hold positions for more than a day, and currency conversion if your account is in another currency.
Finally, test the platform. Most brokers on this list offer a demo account, so you can practise with virtual money before you risk your own.
Best derivatives brokers in 2026
| # | Broker | Best for |
| 1 | Interactive Brokers | Options and futures |
| 2 | Pepperstone | Spread betting |
| 3 | XTB | Low costs |
| 4 | Plus500 | Simple CFD platform |
| 5 | eToro | Social trading |
If you want real options and futures, Interactive Brokers is the only choice on this list, with UK options from £1.70 per contract. For tax-free spread betting, Pepperstone starts from a £10 deposit with no commission. XTB, Plus500 and eToro focus on CFDs, with costs built into the spread.
Whichever you pick, open a demo account first and only trade with money you can afford to lose.
FAQ
What are derivatives and how do they work?
Derivatives are contracts whose value depends on an underlying asset, such as a share, an index, a currency or a commodity. Common types are CFDs, spread bets, futures, options and swaps. You can use them to speculate on price moves or to hedge investments you already hold.
Is derivatives trading risky?
Yes. Leverage magnifies losses as well as gains, and most retail traders lose money. Between 52% and 76% of retail CFD accounts lose money with the brokers in this article.
Can I trade crypto derivatives in the UK?
Not as a retail client. The FCA bans the sale of crypto derivatives to retail investors. Since October 2025, retail investors can buy crypto exchange-traded notes (ETNs) listed on an FCA-recognised exchange.
Is spread betting tax-free in the UK?
Profits from spread betting are currently free of Capital Gains Tax and stamp duty for most UK investors. CFD profits are subject to Capital Gains Tax. Tax treatment depends on your individual circumstances and may change.
Can I lose more than I deposit?
Not on CFDs and spread bets with an FCA-authorised broker, as a retail client. Negative balance protection limits your losses to the money in your account. Futures, and options you sell (write), can lead to losses larger than your deposit.
Charlie formerly worked at the Bank of England and is a qualified lawyer with expertise in intellectual property and technology disputes. He currently writes on about financial markets and investing.
