ADVFN Logo ADVFN

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for tools Level up your trading with our powerful tools and real-time insights all in one place.

The Difference Between CFDs And Spread Betting

CFD (Contract for Difference) and spread betting are both popular trading methods that allow traders to speculate on the price movements of various financial instruments without owning the underlying assets. However, there are some key differences between the two:

  1. Structure. CFDs are contracts between traders and brokers, where the trader agrees to exchange the difference in the value of an asset from the time the contract is opened to the time it is closed. Spread betting, on the other hand, involves placing a bet on whether the price of an asset will rise or fall. In spread betting, the trader bets a certain amount per point of movement in the underlying asset’s price.
  2. Legal and Tax Issues. CFD trading is a regulated activity in many jurisdictions and may be subject to specific rules and regulations, such as margin requirements and investor protection measures. On the other hand, spread betting is often available in countries like the UK, where it is considered a form of gambling rather than trading. As a result, the tax treatment of CFDs and spread betting may differ, and it’s important to consult local regulations and seek professional advice.
  3. Costs. CFD trading typically involves paying spreads, commissions, and potentially overnight financing charges. Spread betting, on the other hand, does not usually involve commissions or spreads. Instead, the cost is built into the spread between the buying and selling prices, which is where the term “spread” in spread betting comes from.
  4. Market Availability: CFDs offer access to a wide range of financial markets, including stocks, commodities, currencies, and indices. Spread betting is primarily available in certain jurisdictions, such as the UK, and typically focuses on financial markets like stocks, indices, and currencies.

Disclosure: Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees

Advertisement

Ultimately, the choice between CFD trading and spread betting depends on individual preferences, local regulations, and the specific features offered by brokers. It’s important to thoroughly understand the characteristics, risks, and costs associated with each method before engaging in either trading approach.

Find a CFD Broker

  • Access over 17,000 markets to trade
  • Trade quickly and smoothly, with technology designed to ensure that your deal goes through
  • Free trading courses and webinars
  • Round-the-clock support 24 hours a day, from 8am Saturday to 10pm Friday

71% of retail investor accounts lose money when trading CFDs with this provider.

Min Deposit:£250 by credit/debit card and PayPal
  • We're regulated in 7 jurisdictions including with the FCA in the UK
  • Access razor sharp spreads from 0.0 pips* and top tier liquidity
  • 99.99% fill rate*, fast execution and no dealing desk intervention
  • Choose from 4 world-leading platforms, including MT4/5 & TradingView

75.3% of retail investor accounts lose money when trading spread bets and CFDs with this provider.

Min Deposit:No Minimum Deposit
  • Over 4,700 instruments to trade
  • Social features, including copy trading
  • Smart Portfolios (ready-made thematic portfolios)
  • Free $100,000 demo account

76% of retail investor accounts lose money when trading CFDs with this provider.

Min Deposit:$100
Mobile App: Yes
  • Free and unlimited demo account
  • +Insights - Empower strategy by analysing millions of Plus500 costumers' activity in real-time.
  • Watchlists - Users can manage multiple favorite lists.

81% of retail CFD accounts lose money.

Min Deposit:$100
CFD
The Difference Between CFDs And Spread Betting
Categories: