Spread betting
when spread betting, you bet an amount of money per point on whether a market will go up or down.
For instance, you might bet £5 per point that the price of the FTSE 100 will fall.
With CFDs you buy and sell contracts that represent a specified amount in the underlying market.
For example one standard FTSE contract might be worth £10 per point.
capital gains tax¶
Spread betting profits are free from capital gains tax,
CFDs are liable because they are a financial instrument.
This may seem a major drawback, but any losses can be offset against future profits for tax purposes, which makes CFDs good for hedging (see below).
stamp duty on share trades doesn’t apply to either spread betting or CFDs, as you never own the underlying shares in either case.
usage¶
- Go long or short
- Trade using leverage (ie trade on margin)
- Access some markets 24 hours a day
Warning
Leverage means leveraged losses.
x 2 seem relatively stable on SNP long tern, but x 3 can wipe out
other option is x3 ETF