What are the differences between Spread Betting and CFDs?

By November 8, 2012 Support

Spread Betting is essentially for UK and Northern Ireland residents while CFDs are available to a global client base. Below is a table of the major differences between Spread Betting and CFDs:

Spread Betting CFD trading
Capital gains are tax free* Subject to Capital Gains Tax (CGT)*
Losses cannot be offset for CGT purposes* Losses can be offset for CGT purposes*
All contracts expire** No expiry (except future contracts)
Use a currency to trade in of your choice Currency based in country of origin i.e. if you trade Vodafone on the FTSE, you trade in £.  If you trade Google on NYSE, you trade in $
Trade using a stake of £/$/€ etc per point Trade a number of CFDs per point

* Under current UK law, which is subject to change and may differ in jurisdictions outside the UK.

** for gaming purposes even rolling contracts have a theoretical expiry date but this is many years in the future.

Trade

CFD Trading involves significant risk.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
64.4% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Professional clients can lose more than they deposit. CFD trading involves significant risk.
Read full Risk Warning Notice.

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