Are CFDs good for day trading?
Verdict
- CFDs suit day trading better than most products, because positions closed before the daily rollover pay no overnight financing and you can go long or short; Pepperstone's Razor account is the one we would use.
- The number that matters is the round trip: on Pepperstone Razor, EUR/USD averages 0.1 pips plus USD 3.50 per side, about $8 per standard lot on MT5 and $7 on cTrader.
- The downside is leverage: ASIC limits retail clients to 1:30 on major FX and 1:20 on major indices, and losses can still mount quickly.
- Pepperstone offers no guaranteed stop-loss, so a fast market can fill your stop at a worse price.
Day trading means many round trips in a session, so small costs compound and execution matters. Here is the case for and against CFDs, costed on Pepperstone's published figures.
Yes, with the right account: Pepperstone Razor
For an active intraday trader the commission account wins: Pepperstone's Razor averages 0.1 pips on EUR/USD, so most of the cost is a fixed, predictable commission. Australian clients deal with Pepperstone Group Limited (AFSL 414530), and Razor runs on all five platforms, including cTrader at USD 3.00 per side. Index CFDs carry no commission on either account.
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What a day of trading costs
| Trade | Razor on MT5 | Razor on cTrader | Standard |
|---|---|---|---|
| EUR/USD, one lot round trip | $8 | $7 | $11 |
| EUR/USD, ten one-lot round trips | $80 | $70 | $110 |
| NAS100 index CFD | 1-point average spread, no commission | Same | 1.2-point average spread |
| US500 index CFD | 0.4-point average spread | Same | 0.5-point average spread |
Why CFDs work for intraday trading
- No overnight financing on positions closed before the daily rollover.
- Selling short is as simple as buying.
- One account covers FX, indices, commodities and shares.
- Pepperstone's 24-hour US share CFDs (24/5) and perpetuals (24/7) let you trade news outside normal sessions.
Why it often goes wrong
- Leverage magnifies small mistakes: at 1:30, a 1% move against a fully margined FX position wipes out about 30% of the margin behind it.
- Costs compound: ten round trips a day at $8 is $1,600 over a 20-day month on one-lot trades.
- Stops can slip in fast markets, and Pepperstone does not offer guaranteed stops.
- Overtrading: the ease of entry is itself a risk.
Execution, as Pepperstone describes it
Pepperstone states fills 'from 50 milliseconds, with a 99.32% fill rate and no dealer intervention', based on its trades from 1 January to 31 March 2026. These are its own figures, not our tests. For automated day trading, cTrader Automate runs C# bots and expert advisors run on MT4 and MT5, with a free VPS for eligible and Pro clients.
Sources
Pepperstone's Australian pages.
Which Pepperstone platform is cheapest for day trading FX?
cTrader on a Razor account: USD 3.00 per side on FX, against USD 3.50 on MT5 and TradingView.
Do I pay swap if I close before the end of the day?
No. Swap applies to positions held past the daily rollover.
How much leverage can I use to day trade indices in Australia?
Up to 1:20 on major indices as a retail client.
CFDs are complex, leveraged products and carry a high risk of losing money quickly. Make sure you understand how they work and can afford to lose what you put in. This page is general information, not investment advice; check each broker's current terms, PDS and TMD before you open an account.