Help! Need dummies guide to CFDs & Spread Betting

frogman_2

Although I understand shares and futures, I just want to make sure I understand the issues of CFDs and spread betting.

How do you choose a CFD/SB company? Is there a website that profiles them or recommends them?

Any information would be gratefully received.

TIA!

Bazn

i'l let a more informed person give u the details.... but IMO these instruments are little more than gambling! so i'd be wary if i were u....

tom188

the general principal is if you dont understand it dont do it. if you do do your own research as your unlikely to find impartial advise on the net.

frogman_2

Thanks for the advice! I do understand that these are not the traditional investment instruments but for some conditions, these prove to be very useful.

BTW, I believe that the volume of CFDs now exceeds the traditional share market...

[Deleted User]

finspreads is good for a beginner re SB and I strongly advise you to paper trade first and then to trade in small amounts always being aware that you can lose your whole money pot and more besides. To be successful you will need to be very knowledgable and good at using TA, otherwise it is gambling, pure and simple

Chrismaths

CFDs and spread betting are as dangerous as you want to make them, or as safe as you want to make them. You just have to know enough to manage your exposure.

Most of the financial spread betting services offer CFD trading as well, and many brokers as well. Soc Gen also offer listed CFDs, which are quite interesting, in that you can trade them through any broker, and you have a guaranteed stop loss, and no margin calls. https://www.listedcfds.com explains them.

As to choosing a broker, look at the range of tradable instruments, and also look at the interest rates they pay - structurally a CFD carries or pays interest, so you may as well maximise this. The only benefit spread betting carries over CFDs is that capital gains are not taxable (but remember losses are not allowable) - but the spreads tend to be wider with spread betting. Personally I prefer CFDs.

frogman_2

Thanks kittie & Chrismaths...I am a paper trader but I think that there are a couple of shares where CFDs might be more advantageous...

Thanks again for your comments and advice!

payless

I made a lot of paper money when I paper traded.... guess what happened when I hit it for real ( this al happened many years ago)