Spread betting and CFD trading are similar in many ways. They are
derivative contracts where a Client and a Provider agree to
exchange cash when the contract closes. They offer gearing, so your
profits or losses are amplified when compared to traditional
investing.
This is where the similarities end; depending on your objectives
one product may be more suitable for you. The table below
highlights the key differences between spread betting and CFD
trading.
| |
Spread
Betting |
CFD Trading |
| |
|
|
Tax
(Tax laws can change)
|
Free of UK Capital Gains Tax thus profits
not taxable but losses cannot be offset.
Free of UK Stamp Duty. |
Subject to UK Capital Gains Tax thus profits are potentially
taxable and losses can be offset.
Free of UK Stamp Duty. |
| |
|
|
| Charges |
Commission and financing charges are built
into the spread, except for daily rolling bets where the finance is
charged daily. |
Separate commission and financing charges are made against your
account. |
| |
|
|
| Contract Length |
Standard spread bets run until the expiry
date or occurrence of the relevant event. It is possible to roll
bets over into the next expiry. Rolling bets automatically roll
overnight into the next day. |
There is no fixed expiry on CFDs. Contracts remain open until
closed. |
| |
|
|
| Range of Instruments |
There is a wider range of instruments
available through bets. Click here for
further information. |
CFDs focus on equity and Index products. Click here for further information. |
| |
|
|
| Trading |
All bets are in sterling and are based on
£'s per point movement. |
Trades are denominated in the local currency and are based on
buying a number of CFDs. |
| |
About Spread
Betting  |
About
CFD trading |