Confused about CFD accounts with IB/IG

[top_underdog]

Hi,

These must be such dumb questions... please bear with me while I try to understand a few things here.

I'm in Australia and recently opened demo accounts with Interactive Brokers and IG with the intention of comparing both platforms while doing some paper trading. IG offers a CFD-only demo account while IB allows you to paper-trade stocks and other instruments. I am confused when it comes to FX though.

Can you please help me with the following questions?

1. It is my understanding that you can trade FX in both CFD and non-CFD ways. Is this correct? (here I mean in general, not with just these two brokers)
2. Can you trade FX in either of these two brokers other than doing CFD?

Any help much appreciated!

Cheers

 

[tomorton]

Q1. Yes.
CFD's are usually offered as a lower cost method for forex trading for private retail traders. The providers might typically offer higher levels of leverage, lower deposit minimum amounts, lower commission fees, etc. The low deposit requirements are a great advantage for novice traders: in the UK, before CFD's and spreadbetting, private retail forex trading was virtually unavailable to the general public as it demanded unaffordable levels of initial deposits.

There can be tax differences also between the two approaches, depending on national or state regulations.

2. Maybe.
I have a UK IG account and I can choose to trade in either CFD's or through spreadbetting, but as SB is not permitted by regulators in most countries you may not have that choice.

 

[0FXTrader0]

With spot FX don't you have to settle the transactions 2days after and with CFD its a synthetic products so there is no settlement.