CFD's or Spread Bet

Tai-pan · Oct 1, 2016

Hi, this is a question to UK traders. Do you trade CFD's or do you Spread Bet, I thought it would always be the best choice to SB but the more I look into it, the more unsure I am. So could you please explain as to why you have chosen one over the other. I also read that when you start trading with larger amounts of money, it is much more comforting knowing that your broker is earning purely by commission rather than acting as a market maker.
I would be most grateful if someone could please enlighten me...thank you.

tomorton · Oct 1, 2016

If you're a UK resident, why would you even think of using CFD's?

Tai-pan · Oct 2, 2016

tomorton said:
If you're a UK resident, why would you even think of using CFD's?

These are my thoughts as well, but UK professional traders do...and I would like to know their reasons.

timsk · Oct 2, 2016

Tai-pan said:
. . .I would be most grateful if someone could please enlighten me...thank you.

Hi Tai-pan,
Welcome to T2W.

This may help: What are the Pros and Cons of Spread Betting Vs CFDs?
Tim.

barjon · Oct 2, 2016

tomorton said:
If you're a UK resident, why would you even think of using CFD's?

Depends on position size and the spread involved. With minimum commissions CFD is usually more expensive despite the tighter spread but if you are lobbing big money at it then spread betting becomes the more expensive option.

tar · Oct 2, 2016

Will go with cfds , more professional for the future ....

Tai-pan · Oct 2, 2016

tar said:
Will go with cfds , more professional for the future ....

Care to explain your reason, what do you mean by 'More professional'.

Thanks

tar · Oct 2, 2016

Tai-pan said:
Care to explain your reason, what do you mean by 'More professional'.

Thanks

You never know maybe in the future you want to show your trading statements to someone , you don't want to be labelled as a bettor - spread betting - , cfds looks better in general , and trading DMA futures and DMA stocks is even better and better . Not to mention that betting is illegal in some countries , what if you want to work in Dubai for example .

What you want to trade ? Stocks ? Which broker you are looking at ?

tomorton · Oct 2, 2016

barjon said:
Depends on position size and the spread involved. With minimum commissions CFD is usually more expensive despite the tighter spread but if you are lobbing big money at it then spread betting becomes the more expensive option.

Well I do take that but I guess I was making assumptions about Tai-pan's situation, re capital and experience.

barjon · Oct 2, 2016

tomorton said:
Well I do take that but I guess I was making assumptions about Tai-pan's situation, re capital and experience.

Yeah, pretty accurate assumption I guess.

luckystrike23 · Nov 18, 2016

For UK residents, spread bets make sense - no taxes on profits and no paperwork to worry about.

As an European I like CFDs; if you make losses in any one year you can roll them forward and use them to offset tax against profits for future years.

CFDs versus spreadbets: http://www.contracts-for-difference.com/compare/cfds-vs-spread-betting.html

Lee Shepherd · Nov 21, 2016

If you need to 'earn' a certain amount of money then CFD's will be the way to go. This way mortgages/borrowing will be available to you. If not and you prefer to be liquid then (UK), spread betting/gambling would be your better option. However you cannot offset losses, winnings are just that and in most circumstances (simplified) would be classed as gambling. If (and that's a big if) you are successful over time then you could show your book to any institution and they would look for you to use funds - in favour of them of course. However, if you make it as a successful private investor, you probably wouldn't want to then dedicate your full time and profits for the benefit of an institution.

Regards,
Lee

jkane · Dec 2, 2016

cfd's

smaller bet sizes, better leverage, tighter spreads

CFD's or Spread Bet

Tai-pan

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Tai-pan

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tar

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tar

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