Spread betting versus Contracts for Difference (CFDs) to trade shares

[italkcash]

So whats the big difference in trading stocks by these two unique ways? Spread Betting vs CFD's, what to pick?
From a tax standpoint spread betting is tax free, while CFD's are not. If you loose you can personally deduct it for the CFD's to pay less tax on the other hand, but you lost anyway so in that sense its a small comfort.

If you were an aggressive intra day or short term trader doing many many trades a day then using spread bets would likely eat into your profits, even though there would be no commission because of the wide bid-offer spreads.

On a side note, Hedge Funds are doing CFD's instead of Spread Betting, simply because their position is not automatically closed as experience with Spread Betting but not in CFD's (here you can cover the loss without closing the position and waiting it out).

[raysor]

With CFDs you may have some control over the price traded. This is because the CFD boys are dealing exactly the same on the market as you can see on your screen. In fact I have dealt with the MM and booked the trade with the CFD provider. I think on some CFD platforms you can actually imput the trade yourself.
CFDs would appear to be a bit more transparent than Spread Betting.

[freetpsnifty]

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