New to Spread Betting and CFDs?
|Benefits||Spread betting||CFD trading|
|No stamp duty*||Yes||Yes|
|No capital gains tax*||Yes||No|
|Go long OR short||Yes||Yes|
|Trade on margin||Yes||Yes|
|Advanced risk management tools||Yes||Yes|
|Superior charting tools||Yes||Yes|
|Access to global markets||Yes||Yes|
|Trade via web desktop and mobile||Yes||Yes|
|Dividend payments & deductions||Yes||Yes|
|*According to current UK tax law. Tax laws are subject to change.|
In Share Dealing you are buying the physical shares in a company. You invest with the expectation that their value will increase and you can sell them when you want, ideally for a profit.
With Spread Betting and CFD Trading you never actually own the physical share. Instead, you are simply speculating on whether the price of an underlying instrument, such as a share, currency, index or commodity will rise or fall. How far the price goes in the direction you predict will determine the amount of gains you make, and how far it goes against you, will determine your level of losses.
A feature of Spread Betting and CFD Trading is that it allows you to use what’s known as geared or margin trading. This can also be referred to as leveraged trading. This means you can trade with a deposit, rather than having to pay the entire value of your position upfront. This gives you the potential for larger gains with a smaller capital outlay (freeing up capital for elsewhere). However, this is part of what makes Spread Betting and CFD Trading a higher risk than Share Dealing as, if the trade goes against you, you could potentially lose far more than your initial deposit.
Advanced Features and Risk Management
Before placing any trades you need a plan. You need to have established where to enter a trade, take a profit or cut a loss. Whether you are placing short positions as a hedge to protect against falls in your existing portfolio, or speculating on intraday price movements, we provide all the tools you need to manage your trades.
By setting a stop loss and limit order you can pre-set where you will cut a loss or take a profit. We also offer guaranteed stops, trailing stops and OCOs on our trading platforms. Our advanced charting features let you place trades and manage orders directly from our charts and we also offer a range of trading tools to support every kind of investor.
We have a wealth of free, on-demand education resources suited to you, whether you are an absolute beginner or a more advanced trader. Take your time to understand both Spread Betting and CFDs to decide which works best for you. If you have any queries and want to speak to us we are here to help.