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        Financial markets offer a wide variety of different instruments for active traders. In recent years, the Contract for Difference (CFD) has become one of the world’s most powerful and popular trading instruments. Investors are able to use CFDs and find new opportunities to profit in the market without any requirements for owning the underlying asset. For investors, this can be beneficial for a wide variety of reasons and this makes CFDs an excellent trading option for active traders that might not be focused on one specific asset class. Profits and losses in CFD trading are based on market price movements that occur after a live market position has been opened. These are relatively simple calculations that compare the price of the security (such as a stock, commodity, or currency pair) at the beginning of the trade to the price of the security at the end of the trade. Once each position is closed, the difference between the asset’s opening price and its closing price will determine the level of profitability that was achieved in the trade. Only changes in price during these periods are considered in the tally, and the underlying value of the asset is not a concern for traders once the position is closed.

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        stocks/2 weeks ago

        I am new to trading, what is the difference between spread-betting and CFDs?

        When it comes to CFD and spread-betting they are very much alike but with one main difference. The first is the difference in the taxes paid on any potential profits made. There is no stamp duty to be paid on either of the accounts, but CFD’s are liable for capital gains tax. So if you do profit from your CFD trading then you will need to account for that. Spread-betting, on the other hand, is different. It is not liable for capital gains tax. One other difference you will need to note is the countries in which you can open a spread betting or CFD account...

        Replied by
        Simon Mugo
        Simon Mugo equities trader