CFD Trading vs Spread Betting

[Rockey]

Hello, I am a researcher. I have made a plan for CDF trading. But different people have a different word. Some suggest I go for CDF. Some are restricting me from it. I am in a dilemma. What can I do right now? An expert tells me to go for spread betting rather than CDF trading. What is the difference between Spread Betting and CDF trading? Please help me!

[Sam Boughedda]

Hey Rockey...

First of all it depends on where you are based. Spread betting is only available to UK and Ireland residents. 

CFDs are available globally.

If you are in the UK or Ireland then I would suggest spread betting. As long as it is not your full time job the profits (if you are profitable) are not liable for capital gains tax. 

When trading them there is no real difference. On both you do not own the underlying asset snd you are merely speculating on price. 

 

If you have any more questions let me know:)
 

 

[Abraham]

Hi 
CFDs are arrangements between financial organizations and investors where traders take a stand on an asset’s future price.
Spread betting, on the other hand, requires you to predict the values of instruments like commodities, stocks, and fixed-income securities. Aside from guessing whether the market will leap or drop, you also decide the amount to place.
Unlike CFDs, spread bets have specific expiry dates. While you can use a broker for spread betting, CFD trades need direct market access, therefore, enhancing transparency. Commissions are also a distinguishing feature.
Although CFDs charge transaction fees, the trader either owes or is owed cash at the end of the spread betting contract depending on whether they make gains or losses. As such, capital gains tax is charged on CFD profits as opposed to spread betting tax-free proceeds. Remember the investor doesn’t own the underlying market assets in both cases.