CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Spread Betting vs CFD Trading

spread bet vs cfd trading
Discover the main differences between Spread Betting vs CFD Trading. Learn the similarities and make a decision which one to trade.

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CFD trading and spread betting have a lot in common, yet they each have their own set of benefits. In this Spread Betting vs CFD Trading comparison, we will highlight the main similarities and differences.

spread bet vs cfd trading

Spread Betting vs CFD Trading Similarities

Trading on leverage

spread betting vs cfd leverage

Traders can use leverage when they trade CFDs or Spread bet. This allows them to potentially make more money with a smaller initial deposit but leverage can also enhance losses, so approach carefully.

No stamp duty

spread bet vs cfd no stamp duty

Both CFD trading and spread betting are exempt from stamp duty* in the UK because you do not own the underlying assets.

Rising and falling markets

cfd vs spread betting: rising and falling markets

CFD trading and spread betting, unlike traditional stock trading, allow you to trade both rising and declining markets.

24-hour trading

24hour trading

During the trading week, both CFD and spread bet markets are open 24 hours a day, allowing you to profit from market moves at any time.

Spread Betting vs CFD Trading Differences

Contract size

contract size

The contract size in spread betting is usually measured in an amount of money per point/pip (GBP per point/pip) and depending on how the market behaves, you earn or lose the difference between your entry and exit point, multiplied by the bet amount. CFD trading, on the other hand, allows you to purchase or sell contracts that represent a certain amount of the underlying market.

Tax

tax

In the United Kingdom, spread betting is exempt from capital gains tax*, although CFDs are subject to tax deductions. CFD losses can be offset against future profits, making CFD trading a cost-effective option to hedge a physical stock portfolio.

*please seek tax advice from professionals regarding the tax implications, as they can vary depending on your circumstances

Want to know more about Spread Betting? Check this article.

You can check our list of top spread betting brokers here. 

If you are a beginner, you can check our article on best spread betting platforms for beginners here.

Alternatively you can filter and compare spread betting brokers here.

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Capital.com

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Mobile Trading

Trade on Margin

Direct Market Access

Offers US Stocks

Accept Paypal

Offers UK Stocks

Offers MT4

Allows Scalping

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Accepts Credit Card

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Fixed Spreads

Variable Spreads

Offers Demo Account

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VPS Trading

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Mobile Trading

Trade on Margin

Direct Market Access

Offers US Stocks

Accept Paypal

Offers UK Stocks

Offers MT4

Allows Scalping

Copy Trading

Accepts Credit Card

Allows Hedging

ECN or STP Execution

Offers Altcoins

Offers Crypto Crosses

Fixed Spreads

Variable Spreads

Offers Demo Account

Professional Status

BIGINNER

VPS Trading

Zero Spread Account

How experienced are you at trading?

Select the ‘must-have’ features or requirements that are important to you

beginner

Intermediate

EXPERT