Understand the core differences between CFDs, stocks, forex, and more — and choose the right tool for your strategy.
CFD vs Spread Betting: What’s the Difference?
Tax Treatment
Spread betting in the UK is typically exempt from capital gains tax — because it's legally classified as betting.
CFDs, on the other hand, are financial instruments. Profits? Taxable. No exception there.
Jurisdiction
Spread betting isn’t global. It’s mainly available in the UK and Ireland. If you’re outside those regions, it’s likely not even an option.
CFDs are offered in most jurisdictions — though local rules still apply.
Trade Structure & Language
CFDs: You buy or sell contracts, enter a position, set stop-losses.
Spread betting: You stake an amount per point of price movement.
Who It’s For
Spread betting appeals to UK-based traders looking for tax efficiency and clean execution.
CFDs are more flexible and widely available — suited for anyone who wants broader market access.
Learn more about the difference between CFDs and Spread Betting.
CFD vs Stocks (Share Dealing)
Ownership vs Price Speculation
Buying stocks means you own a piece of the company. You hold real shares.
With CFDs? No ownership — just exposure to the price movement. You're not in the boardroom. You're watching the chart.
Dividends & Voting Rights
Shareholders may receive dividends and can vote on corporate matters.
CFD traders don’t get that. They might see price adjustments for dividends, but there’s no payout, no voice.
Short-Term vs Long-Term Thinking
CFDs are built for speed — short-term views, tactical trades.
Stocks lean long-term. They benefit from compounding, reinvested income, patience.
Learn more about the difference between CFDs and Stocks.
CFD vs Futures: What’s the Real Difference?
Expiration vs Flexibility
Futures come with expiration dates. You trade the contract until it settles — or roll it over.
CFDs? No fixed term. You close the position when you want (or need to).
Exchange vs Broker
Futures are traded on centralized exchanges and cleared through official mechanisms. That means higher transparency — but also more capital, more paperwork.
CFDs? Over-the-counter. Broker defines the terms. Faster in, faster out — but you trust the platform more.
Size & Accessibility
Standard futures contracts are big. Sometimes too big for a small account.
CFDs are fractional. You can scale your exposure to your budget. Which makes them retail-friendly — but again, more variable.
Learn more about the difference between CFDs and Futures.
CFD vs Options: What's Easier — and What's Smarter?
CFDs: Straightforward but Fast
With CFDs, you’re speculating on price. That’s it. Long or short, no Greeks, no expiration dates, no multiple legs. Good for quick trades, trend plays, or just… reacting. But simple doesn’t mean safe.
Options: Layers, Logic, and Limits
Options offer defined risk — you can’t lose more than the premium (if you’re the buyer). But they also come with structure: calls, puts, expiry, volatility. It’s powerful once you understand it.
Learn more about the difference between CFDs and Options.
CFD vs Investing: Two Very Different Games
Speculation vs Ownership
With CFDs, you're not buying the asset — just speculating on its direction. It's about price, not possession. No dividends. No voting rights. Just movement.
Holding Time & Intent
CFDs are for short bursts — hours, maybe days. They’re built for reacting.
Investing is slower. Months, years. It’s about letting time do the compounding.
Learn more about the difference between CFDs and Investing.
CFD vs ETFs: Risk, Strategy, and Structure
Risk & Liquidity
CFDs are fast, often volatile, and come with leverage by default. More flexibility — but also more risk.
ETFs are generally more liquid, especially the big ones, and built for stability, not speed.
Passive vs Active
ETFs are passive by nature — you track a market, hold, and (hopefully) grow over time.
CFDs are for active trading. Quick entries, fast exits.
Learn more about the difference between CFDs and ETFs.
CFD vs Forex: What's the Difference?
Is Forex Just Another CFD?
Often — yes. On most retail platforms, what you’re trading is forex via a CFD structure. There’s no physical currency exchange. You're speculating on the price movement of EUR/USD, GBP/JPY, and so on.
When to Use Spot Forex vs Forex CFDs
Need direct access to interbank liquidity through an ECN model? That’s spot forex.
Want easier setup, faster trades, built-in leverage? Forex CFDs often do the job.
Learn more about the difference between CFDs and Forex.
CFD vs Swaps: Two Worlds, One Concept?
CFDs: Built for Retail
CFDs are made for individual traders. Accessible platforms, quick execution, small entry capital — that’s the ecosystem. Speculate on price, go long or short, close when ready. No paperwork. No gatekeepers.
Swaps: Institutional Only
Equity swaps live in a different space. Structured deals between big players — banks, funds, desks with compliance departments. They’re used for synthetic exposure, tax positioning, and balance sheet tactics. You don’t find them on MetaTrader.
Learn more about the difference between CFDs and Swaps.
Summary Table: CFDs vs Other Instruments
| Parameter | CFDs |
|---|---|
| Ownership | No |
| Leverage | Built-in |
| Risk Level | High, especially with margin |
| Liquidity | Depends on asset |
| Holding Period | Short to medium |
| Stocks | ETFs |
| Yes | Yes |
| Not standard | Limited |
| Moderate | Moderate |
| High | High (on major funds) |
| Medium to long | Medium to long |
| Options | Futures |
| No | No |
| Implied via premium | High |
| Variable — defined or open | High (especially for retail) |
| Mixed (by strike & expiry) | Very high (on major contracts) |
| Short to expiry | Short to medium |
| Equity Swaps | |
| No | |
| Rarely used | |
| Structurally mitigated (usually) | |
| Private — not visible | |
| Usually medium-term |