Spread Betting or Contract For Difference (CFD) accounts are a recent development for UK private investors. Both spread betting and contracts for difference are complex investment vehicles and definitely should not be considered by inexperienced investors. If you are new to direct investment in the stockmarket start with an online trading account and build up your knowledge and experience first.
When making a spread bet or CFD, the investor is not purchasing a physical asset. Instead they are betting on a range of outcomes. For financial spread betting the outcome bet on is price movement of shares, commodities or other investment vehicle. For sports spread betting the outcome can be any one of a number of variables within that specific sports event (for example, goals scored in the first half, corners taken in the second half, free kicks awarded etc).
Because of this spread bets or CFDs are short term investments, typically made over a period of days or weeks rather than years. As money is made primarily from price volatility rather than growth, profits come from other traders rather than the company or general stock market.
If you need more information to decide which Spread Betting or Contract For Difference Account is the best for you, then check out
TheRateTart Guide to Spread Betting & CFDs.
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