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FAQ Page 4 - Question 41

Q: What's the difference between a spread bet and Contracts for Difference (CFDs)?

A: They're both leveraged products but the spread bet is tax-free with Contracts for Difference being taxable. The stock prices quoted are also different in that most CFD brokers will quote the same prices as you'd deal at in the stockmarket. Spread betting prices are quoted by the individual broker with costs etc built in via the bid-offer spread that they charge. CFDs are also normally only traded on stocks with spread bets available on most financial products including commodities and currencies.

There are also other differences and for anyone who wants to know more then they should check out the guides on both CFDs and Spread Betting on this site. Click here for CFDs and here for spread betting.

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