CFD vs Spread Betting

[GCC]

I am new to trading, I have a question regarding CFD:

How is CFD different from spread betting?

To me,

- both are speculating without the actual instruments,
- both are "trading against" the brokers,
- both have similar adavantages like high leverage and execution speed.

So, is there big difference between the two?

 

[KillPhil08]

tax and where you live in the world decides whether your allowed to use spreadbetting or not(i think).

do a search, there are lots of threads about this.

 

[GCC]

tax and where you live in the world decides whether your allowed to use spreadbetting or not(i think).

do a search, there are lots of threads about this.

Thanks, I will search the forum.

But judging from what you say, do you mean that spread betting is better in the sense that it evades tax, as long as the place you live allow spread betting?

 

[KillPhil08]

Exactly.

 

[dodge149]

Spread Betting is really just a punt on which way you believe a market is heading, whereas CFD's you lay down a (e.g) 10% margin... so would only need to put down £100 for say a £1000 position. CFD's are also liable to capital gains tax, whilst spread betting is classified as betting and therefore is tax free (in the UK anyway).

 

[GCC]

Spread Betting is really just a punt on which way you believe a market is heading, whereas CFD's you lay down a (e.g) 10% margin... so would only need to put down £100 for say a £1000 position. CFD's are also liable to capital gains tax, whilst spread betting is classified as betting and therefore is tax free (in the UK anyway).

Thanks for the reply.

 

[luckystrike23]

CFDs and SpreadBetting Compared