Monthly Archive: May 2016

Comparing CFD and Spread betting: Risks and Rewards

Some active traders, particularly in the UK, prefer investing in spread betting and Contract For Difference (CFD). For newbies, these trading platforms may seem similar, thus to make everything clear, it’s essential to determine the difference between CFD and spread betting specifically in terms of risks and rewards.

Apparently, the difference between spread betting and CFD is very minimal. These are both derivative products in which the investors speculate whether the price will fall and rise. The investors are allowed to go short or long, and they can also improve the leveraged product. This means that even if an investor puts a small deposit, he can expect for significant exposure to the underlying asset in the market.

On the other hand, CFDs are associated with real assets including currencies, commodities or shares, while spread betting commonly takes place in a wide range of activities such as sporting events.

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Common Factors