I've read a few articles online that try and explain this, but they both just sound like the same thing with different names? I have been advised that CFD trading is better and to be fair, my broker Jones Mutual only offers CFD trading, but should I be looking at spread bets as well?
What's the difference between CFD trading and Spread Betting?
- Thread starter James Nicole
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I would appreciate it if you explain further. So only residents of both places can participate in spread betting?
No, some brokers allow spread betting for everyone, but spread betting is useful only if you live in the United Kingdom or Ireland because spread betting profits are tax-free there.
Some brokers have no direct access to the markets, so the alternative they provide is CFD trading. For expamle, the price on CFD on stocks is the same as the stock price itself, but in case of CFD you trade with your broker instead of buying equity. This approach also gives possibility to avoid intraday trading limitations for small accounts.
This actually underscores their similarity rather than demonstrates their differences.
CFD trading and spread betting both let traders speculate on price movements without owning assets. The key difference is tax and structure: CFD trading involves buying contracts reflecting asset prices, while spread betting is a wager on price direction. Profits from spread betting are usually tax-free in some regions.
