Let us first define the meaning of it is a contract between two parties, characterized as "buyer" and "seller", demanding or specifying ( a requirement) that the seller will pay to the buyer the difference between the current value of an asset and its value at contract time.
There are similar basic in forex trading, spread and CFD trading but there some key differences. Here are the key differences:
1. Range of Markets: it offers a wide range of markets to trade which includes stocks, indices and forext, while forex trading offers pure currency trading only on 37 pairs of forex.
2. Commission: in CFD, it will be charged a small commission for each trade you place. Trading in CFD markets, spread bets and forex trading it is free from commission.
3. Guaranteed Stop Losses: This is available on spread betting and CFD platforms only. For forex trading, standard stop losses are available.
4. Trading Platforms:
5. Greater Leverage: you can trade our forex pairs up to a margin equivalent of 0.25%, greater than what is currently offered for forex markets via our spread betting and CFD platforms.
6. Capital Gains Tax: it is free in UK to spread bet and this is not applicable to gains made in CFD or Forex trading.
7. Trade Sizes: in forex, spread bets and CFD, trade sizes varies.
8. Margin/Leverage calculations: All forex trades are undertaken with a leverage ratio such as 100:1. However, spread bets and CFD markets are margined in a different way, as either fixed percentage such as 5% or margin factor such as 60 x stake.