Spread Betting vs CFD Trading

Learn more about the differences between spread betting and CFD trading.

Similarities

The fundamentals of spread betting and CFD trading are in fact very similar but there are some key differences. This section aims to identify those similarities and key differences to help you to decide which trading account to open with us.

  • Range of markets
    Spread bets and CFDs offer a broad range of markets to trade including indices, stocks, commodities and forex
  • Trading platforms
    You can trade on City Index's browser-based or downloadable platforms as well as native mobile and tablet trading platforms
  • All order types
    Our full suite of order types are available to both spread betting and CFD trading accounts
  Spreads CFDs
Range of markets Thousands of global markets including shares, indices, FX and commodities Thousands of global markets including shares, indices, FX and commodities
Commission Free Equity markets only
Widened Spread Yes Non-equity markets only
Trade Size £ per point CFDs
Minimum Trade Size 50p per point 1 CFD
Platforms Available Browser, mobile and tablet Browser, mobile and tablet
Risk Management Orders Full tools available Full tools available
Demo Account Yes Yes

Key differences

  • UK Capital Gains Tax*
    Currently in the UK, any profits made from spread betting are free from UK Capital Gains Tax. This benefit is not applicable to profits made from CFD trading
  • Commission
    CFD equity trades are the only positions you are charged a commission for on each trade you place – other CFD trades do not carry a commission charge. Spread betting positions on any instrument do not incur a commission charge, but you pay a slightly wider spread
  • Trade Sizes
    Trade sizes differ across spread bets and CFDs. Spread bets are traded in pounds per point. With CFDs you trade a number of CFDs. For example, a £1 spread bet is the equivalent of 100 shares in a CFD equity trade

Spread betting vs CFD share trade

To illustrate the difference in spread betting and CFD trading, let’s say you go long on a UK based Company ABC’s shares. The example below shows how you would do this as a spread bet and the equivalent CFD trade.

Spread betting vs CFDs

Next chapter Spread Betting Tips

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