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You Are Here: Home > Stockmarket & Trading > Spread Betting Section > FAQ : Question & answer
The difference between Spread Bets and CFDs
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They're both leveraged products but where spread bet profits are tax-free, they're taxable with CFDs.

Other differences include -

  • The bid-offer spread on a CFD is usually the same as if trading the underlying share, this is not the case with spread bets where the quote is derived from the underlying market and might be very different
  • Losses on CFDs are offsettable against tax
  • Margin is different between the two products, although it works out at a similar cost
  • CFDs are normally always traded on stocks whereas spread bets are traded on many different markets
  • Commissions are levied on CFDs
So which product is better to use? It's a hard question to answer but most professional traders, ie those who trade for a living and who operate in the stockmarket, tend to prefer to trade CFDs.
WARNING! - Spread Bet Broker Advice



There are good spread bet brokers and there are bad ones.

Having a good broker won't guarantee you profits but a bad broker will probably lead to losses as a combination of their gamesmanship and suspect software takes its financial toll.

So who do I recommend?

Simple, the 2 brokers I personally use for my own spread betting (and I've used them for years) -

FREE Report : How to Learn Spread Betting and Prosper
How to build the all-important trading experience
Where to get trading help and advice
Which broker to use and why
Simple 2 month training plan to follow
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