Spread betting and CFD trading has many benefits, there are many advantages added to both which are unique in its own way. Both are almost identical and can magnify returns and amplify losses too.
Spread bet permits you to speculate on the financial markets; the difference in the buying and selling if the currency difference is called bid. You are not trading the markets, you’re betting on a variety of possible result supported on the fundamental information. All spread bets have a fixed expiry or ending date. ETX Capital will guide with the options of spread betting and it is a platform for you to choose best investment as per your need.
CFD is a financial derivative, where you trade a contract stands on prices imitative from the fundamental market. Via Direct market access, you trade a CFD and we place a parallel trade in the market. Excluding futures, binaries and options, CFDs don’t expire.
Let’s find out the differences in the Spread betting and CFDs
Spread betting
- There is no capital gains in tax
- There is no commission other than your spread.
- Easy to bet as per the currency of the individual traders choice.
- Greater control on the currency exposure
- Deals available on rising and falling markets.
- There is no need of stamp duty.
- Dealing or the trading is open 24 hours
- It gives the traders all the leveraged to access the markets
- Use prices based on the fundamental market
CFDs
- It gives a Direct market access on Forex and shares
- The trading happens on the market price of shares
- For the purpose of tax losses can be offset
- Deals available on rising and falling markets.
- Leveraged access to the markets
- Deals available on rising and falling markets.
- Dealing or the trading is open 24 hours
- Use prices based on the fundamental market
What is better for you?
Spread betting is better for those who want benefits as mentioned below.
- If you want any profits to be tax-free
- If you want to control the deal size
- You do not want to get penalised by minimum commission and you can deal shares in smaller sizes.
- You want to deal in international markets
- In order to view a long term Forex shares with forward markets
CFD trading is better for those who want benefits as mentioned below.
- You’re comfortable with the fundamental market and its terms, so want a product that feels alike
- You want to use direct market access for shares and Forex trading, while getting our on the counter benefits.
- If your purpose is offsetting the tax losses
- You want a corporate or specialized trading account
- You want to hedge physical asset
- You want an efficient way to hedge using the tax-deductible benefits of CFDs