Both contracts CFDs and spread betting are popular forms of derivatives trading, whereby investors can speculate on the movements of the financial markets without actually buying any underlying assets like shares or commodities. Both are leveraged products, enabling you to open a position while depositing just a percentage of the capital.

Specifically, CFD trading allows you to trade a contract based on prices derived from underlying markets such as forex, indices, commodities, shares and treasuries. A spread bet (spread betting) allows you to bet on a range of potential outcomes based on the underlying data. All spread bets have a fixed expiry date.

Advantages of Spread Betting

  • No capital gains tax
  • No commission
  • Easy to bet in the currency of your choice
  • Deal on rising and falling markets
  • Leveraged access to the markets
  • No stamp duty
  • Use prices based on the underlying market

Advantages of CFDs

  • Direct market access (DMA) on forex and shares
  • Trade at the market price on shares
  • Losses can be offset against profits for tax purposes
  • Deal on rising and falling markets
  • Leveraged access to the markets
  • No stamp duty
  • Use prices based on the underlying market

Important notice: Please note that spread bets and CFDs are complex investments and come with a high risk of losing money rapidly due to leverage. First Sentinel only trades these instruments for professional and high-net-worth clients. You should consider whether you understand how CFDs and spread bets work and whether you can afford to take these risks. If in doubt, please seek advice from an independent regulated advisor.

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