Contract For Differences (CFD) – Chapter 9: The differences between Spread betting and CFD Trading

This is chapter number 9 out of 12. Read the rest:

Read Contract For Differences (CFD) – Chapter 1: An Introduction to CFD’s
Read Contract For Differences (CFD) – Chapter 2: The benefits of CFD’s
Read Contract For Differences (CFD) – Chapter 3: The risks of investing in CFD’s
Read Contract For Differences (CFD) – Chapter 4: The Main Features of the CFD’s
Read Contract For Differences (CFD) – Chapter 5: Trading In Bullish & Bearish Markets
Read Contract For Differences (CFD) – Chapter 6: How CFD’s work
Read Contract For Differences (CFD) – Chapter 7: Shares Trading Versus CFD’s Trading
Read Contract For Differences (CFD) – Chapter 8: Available Markets for Trading CFD’s

Although there are many similarities between spread betting and CFD trading, there are also differences between these two forms of trading. It is important to know their similarities and differences so that you can decide for yourself which is more suited towards your investment objectives.

Similarities:

1. No stamp duties payable.
2. No outright owning of shares thus has none of the privileges accorded to shareholders with regards to ownership.
3. Margin trading is available.

 

Differences:

1. Commission is payable for CFDs trading whereas spread betting has none.
2. CFDs gains are subjected to CGT whereas profits made from spread betting are tax free.
3. In relevant cases, CFDs earn dividends whereas there is no dividend to be paid for spread betting.
4. Traders have the option to settle the CFDs whenever they choose whereas for Spread betting, ownership is fixed and there are additional costs if the spread bettor wishes to roll over the bet. 

 

Read Contract For Differences (CFD) – Chapter 10: CFD Trading With Stop Losses
Read Contract For Differences (CFD) – Chapter 11: Other Types of Orders
Read Contract For Differences (CFD) – Chapter 12: Conclusion