Spread Betting vs. CFD Trading - What's the difference?
There are many similarities between these two types of trading. It is useful to know the key comparison features in order for the trader to make a decision on which one bests suits his means.
Similarities:
No Stamp Duty is paid for spread bets or CFDs
The trader does not own the shares he is trading with and so has no voting rights
Margin trading is used
Differences:
Spread betting is commission-free, CFD trading is not.
Spread betting is exempt from Capital Gains Tax, CFD trading is not.
Dividends are paid, where relevant, out to CFD traders but not to spread betters.
CFD contract periods are flexible, Spread bets are based on a fixed ownership where costs are incurred if the trader wants to roll the bet over.
