CFD vs Options Differences and Similarities

Two of the most popular forms of derivatives are CFDs and Options, both of which offer unique outcomes to traders. Continue reading our CFD vs options guide to discover which of these instruments is right for you.

We’ll also discuss how you can begin your CFD trading journey with us at CAPEX – The best CFD online broker for beginners and experts alike.

Sign Up Now

Practice trading on our risk-free demo trading account

The benefits of practising trades on a CFD demo trading account are that you get a clear idea of where you stand as a trader, you understand the risks involved with trading an instrument. You get to practice trading by applying strategies and seeing the outcome of your demo trades. With CAPEX, you can sign up for a free demo account and practice trading without limits. We allow our demo account users to benefit from our learning tools so they can practice trading effectively until they’re ready to invest actual capital.

Trade CFDs on the smoothest trading platform

One of the most important aspects of trading CFDs successfully is signing up with a trading platform that is user-friendly, highly intuitive and has a simple interface. Here at CAPEX, we offer traders two unique trading platforms- The MetaTrader 5 (MT5) and CAPEX WebTrader.

Both our trading platforms are designed to provide the best trading experience for all traders. The moment you hop on to our trading platform, you’ll notice everything is easily accessible and neatly aligned on the home page. Whether you want to make a deposit, make a withdrawal, start a trade, or follow up on your investments, everything is just a click away.

Sign Up Now

What is a CFD? – Understanding how CFDs work

Contract for difference is a popular form of financial derivatives in which traders buy and sell contracts rather than physical assets. The buyer and seller speculate on an asset’s price and make a bet on its movement – whoever’s speculation is correct ends up in profit.

In simpler terms, if a CFD trader senses that an asset’s market value is about to rise, they will invest based on that speculation by going long/ buying a contract. However, if the trader speculates that the asset price will fall in the near future, they will go short/ open a position in the market.

Pros of trading CFDs

  • CFDs are traded on margin, allowing traders to invest limited capital in return for greater market exposure.
  • CFD traders can benefit from falling and rising markets by either going long or going short.
  • CFDs can be traded on numerous financial instruments, so they make it easy to diversify your trades and open doors to endless trading opportunities.
  •  If you trade CFD on stocks, you might get access to dividends.

Cons of trading CFDs

  • Trading with leverage makes CFDs risky instruments as you can lose more than you’ve invested.

Here at CAPEX, we offer CFD traders over 2100 tradable instruments along with several tools and features to reduce the riskiness of CFDs. For instance, you can learn trading through our excellent learning tools and features, follow our expert trading blogs to keep up with ongoing market trends, and even follow expert traders through a feature available on our MT5 trading platform.

Get Started with CAPEX

Experience a new level of trading with the right support when you need it. Sign up for a free account and trade smart with

Create Account

What are options? – Understanding how Option trading works

Options are another famous type of financial derivative in which a trader gets the right to buy or sell an asset or security on a fixed date at a specific price. However, this right comes with a cost, which is known as ‘premium trading cost’. If an option buyer pays a premium, but the market prices don’t go as he presumed, they can let the option expire to ensure the loss doesn’t exceed the cost paid as a premium.

There are two selections in options trading, ‘call’ and ‘put’. If the buyer chooses the call option, he or she gains the right to purchase a given asset at a predetermined date in the future. If the buyer opts for the put option, the buyer will obtain the right to purchase an asset at a predetermined price in the future.

Pros of trading options

  • Options are considered cost-efficient as they can be traded with high leverage.
  • Options have a high potential return.
  • The risk factor in options trading is less.

Cons of trading options

  • Options have less liquidity.
  • The commission rates are usually high for options trading.
  • Limited trading options as you can’t trade options on all stocks.

Knowledge is Power!

When it comes to your money - it's priceless.

An investment in learning how to trade always pays the best dividends. Get access to the right resources, tools and information so you can trade with all the information available!

Sign Up and enjoy our in-platform trading lessons

CFD vs Options - Differences and similarities

First, let’s go over CFD vs options similarities. The primary similarity between CFDs and options is that both are derivatives. Another similarity worth noting is that both instruments are traded with leverage. However, there are several differences to be considered between the two instruments as well. For instance:

  • While CFDs don’t involve the buying and selling of an underlying asset, instead, it involves an agreement between two parties to exchange the variation in the value of an underlying asset after a certain period of time. Options involve buying the right to purchase a given asset or security without any obligations.
  • CFDs are more cost-effective to trade compared to options, especially if you’re trading with a CFD broker with low commissions.
  • CFDs are far less complicated, whereas options can be complex instruments.

Trade CFDs with some of the lowest fees

Trading with a low fee broker means you get to cut costs and keep most of the profits to yourself. Doesn’t that sound fantastic? CAPEX allows traders to invest in over 2100 instruments with the lowest trading fees. The spreads on our platform and our commission rates are lower than the market average, and we don’t have a deposit or withdrawal fee. The best part is that despite charging the lowest fees, we’re able to offer the best CFD trading experience to our users.


Options vs CFDs – What’s the better choice for you?

Now that we’ve discussed the process of trading CFDs and options along with the pros and cons both instruments offer, it’s time to answer the million-dollar question ‘What’s the better instrument for you?’

No instrument is better than the other; it all comes down to what you’re looking for as an investor. If you’re looking for a more flexible trading option where you aren’t under any obligations to purchase or sell an asset, options might suit you better. However, if you’re someone who has limited capital, wants to invest in numerous markets to diversify your trades, and would prefer trading a simpler instrument, CFDs should be your go-to option.

With us at CAPEX, you can trade CFDs on over 2100 unique trading instruments on our smooth trading platforms. Plus, we offer some of the lowest trading fees while ensuring our users have the best possible trading experience with available customer support, numerous learning tools, and a wide range of instruments to invest in.

Benefits of trading CFDs with us at CAPEX

Here are a few benefits CAPEX offers its traders:

  • At CAPEX, you can choose between two excellent trading platforms – CAPEX WebTrader & the MT5 Trader. Both platforms are easy to use and offer quick access to trades. Our trading application is available on iOS and Android.
  • We offer our traders excellent customer support seven days a week. Our customer support services can be availed through email, phone, and live chat. Plus, we have an elaborative FAQs page where you’ll find the answers to most of your questions.
  • We believe learning is the key to becoming a successful trader, which is why we offer our traders several learning tools, including an online trading school – CAPEX Academy. You can also learn trading terminologies through our trading dictionary and follow market trends through our expert trading blog.

Our users are our number one priority, and we’re dedicated to providing traders with the best CFD trading experience from every aspect.




Register an account on and start trading.


Send over your documents and verify your account.


Login into your account and deposit money.


Start trading with CFD’s and over 2100 other instruments.

How to begin your CFD trading journey today – Sign up with CAPEX

Signing up with us at CAPEX couldn’t get easier. Follow these simple steps to begin your trading journey with us today:

  1. Visit our website and click on the sign-up option.
  2. Enter a few basic details such as your name, email address, and age and click on the sign-up option.
  3. You’ll then be redirected to our trading platform and will be asked to complete your registration.
  4. Add a few more details, including your salary, taxation, and credit history.
  5. Lastly, you’ll have to take an assessment in which we’ll judge your trading skills. This is to ensure you’re placed on our platform according to your trading capacity.

Once you’ve finished the registration process, your account will be verified in no time, and you can begin your trading journey without any minimum deposit requirements. However, we do recommend practising on our CFD trading demo account beforehand to ensure you’re prepared to invest your money.

Final thoughts – Trade CFDs at CAPEX

The key to choosing which instrument to trade is learning about the pros and cons each instrument offers and aligning them with your trading goals.

In our options vs CFD guide, we reached the conclusion that CFDs are ideal for traders who have limited capital and want greater opportunities to begin with. In contrast, options might be the better choice for someone who wants more control over their trading experience or doesn’t want to be under any obligations.

Although CFDs definitely offer more pros and fewer cons when compared to options, so there’s no harm in giving CFD trading a try. So, if you want to give CFD trading a try with one of the best CFD trading platforms out there, sign up with us at CAPEX within minutes and begin trading CFDs on over 2100 instruments, that too, with the lowest trading costs.

CFD vs Options – FAQ

🤔 Is trading with leverage risky?
👀 Can CFD trading make you rich?
🎇 Is leverage trading ideal for all traders?
🤷 Can options expire worthless?