Use our comparison tables to compare the best Ethereum brokers authorised and regulated by the FCA. Choose or switch to a broker that offers the most markets, best pricing and client security.
CFD, spread betting and trading Ethereum on leverage carries a high level of risk and can result in losses that exceed your deposits.
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Ethereum Price and Chart
How do you trade in Ethereum?
Ethereum is an online software platform. As such, you can’t actually buy Ethereum. Ether is a Bitcoin-style cryptocurrency which is used to buy applications on the Ethereum network. People often talk about Ethereum trading when in fact they are trading in Ether. The currency has seen a rapid increase in value over the past year as well as a swift reversal. This volatility has helped make Ether a popular target for investors.
How Ether trading works
The most obvious way to trade in Ether is to buy the currency. However, if you want to bet on Ether declining in value then you will need to take out a contract for difference or place a spread bet based on the currency’s future value. These instruments require the investor to predict whether Ether’s value will increase or decline.
If you think it will decline, the CFD/spread betting provider will set a bid price and if the currency moves below it then you will receive your initial stake multiplied by the difference between the Ether price and the bid price. Similarly, if you think it will increase then the provider will set an ask price and if Ether does appreciate then you will receive the difference between that and the Ether price multiplied by your stake.
If the currency moves in the opposite direction to your prediction then you must pay the provider the difference times your initial stake.
How to get started
In order to buy the currency you will require an online or offline wallet. For security reasons many people prefer to have an offline paper or hardware wallet that can be locked away in a safe.
Due to the fact that CFDs and spread betting don’t involve buying actual currency, there is no need for wallets with all of the potential for hacking that they entail. All that is required is an account with a broker that provides CFDs or spread betting services for Ethereum.
Due to the relative youth of the currency, there are fewer Ethereum CFD/spread betting providers than there are for Bitcoin. However, an increasing number of the major foreign exchange brokers are now covering the currency. Typically, these providers will offer leverage, where you can borrow money from the broker in order to increase your stakes.
What to avoid
When using CFDs and spread betting there is always a risk of losing more than your initial deposit. This will be amplified if you use leverage. Don’t open up positions where you will not be able to cover the potential losses. In order to minimise the risks associated with this form of investment it is always advisable to set up stop loss orders that will shut down your position if your losses reach a certain level.
What to look for
As with any form of investing you will stand a better chance of making a profit if you understand the asset involved and what determines its value. A full understanding of the Ethereum network and the motivations behind those who invest in it is highly advisable before risking any money.
An example of Ether trading
Say an Ethereum broker is offering a CFD with a bid price of 1048 and an ask price of 1050 and the investor takes the bid price with a stake of £10. If the price then appreciates to 1070 before the investor closes his position he will lose £220, i.e. %281048-1070%29×10=-220.
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