Forex Factory (https://www.forexfactory.com/forum.php)
-   Rookie Talk (https://www.forexfactory.com/forumdisplay.php?f=56)
-   -   Forex Trading vs. Spread Betting (https://www.forexfactory.com/showthread.php?t=181283)

lucashammer Jul 8, 2009 12:05pm | Post# 1

Forex Trading vs. Spread Betting
 
Alright. I'm not exactly new to trading, but I'm not an expert either. Can someone help me with the difference between spread betting and forex trading? I opened a demo account with FXCM UK and I can't seem to find the difference other than pip value. Am I missing something?

blacksun1 Jul 8, 2009 1:29pm | Post# 2

Alright. I'm not exactly new to trading, but I'm not an expert either. Can someone help me with the difference between spread betting and forex trading? I opened a demo account with FXCM UK and I can't seem to find the difference other than pip value. Am I missing something?

from what i know, sped betting is tax free because it's considered gambling. i think gambling is tax free in the UK. this is how i had it explained to me once. i'm pretty sure that's the only difference though.

MyaNyx Jul 8, 2009 1:53pm | Post# 3

Spread Betting doesn't have spread.

But it is gambling so it's not halal for muslim traders.

Jason Rogers Jul 8, 2009 2:53pm | Post# 4

Alright. I'm not exactly new to trading, but I'm not an expert either. Can someone help me with the difference between spread betting and forex trading? I opened a demo account with FXCM UK and I can't seem to find the difference other than pip value. Am I missing something?
blacksun1 is on the right track.

Spread betting is an account classification that allows UK residents to trade in the forex market tax free, meaning capital gains are not taxed by the UK government. From a trading and execution stand-point there's no difference between the forex trading account and spread betting account. The same platform is also used for each.

Spread betting is tax free due to the UK tax code. So if you reside in the UK, then it's in your best interest to trade a spread betting account.

The pip value on the spread betting account is different since the account is denominated in GBP.

Hope that helps,

Jason

PeterFM Jul 8, 2009 3:56pm | Post# 5

You might want to look at this as an alternative....
 
Alright. I'm not exactly new to trading, but I'm not an expert either. Can someone help me with the difference between spread betting and forex trading? I opened a demo account with FXCM UK and I can't seem to find the difference other than pip value. Am I missing something?
Binary options. At least the prices are based on a regulated board's closing prices and there aren't market makers controlling the prices.

Why Binary Forex Options are better than Spot Forex

praetserge Jan 10, 2010 7:18am | Post# 6

They work in the same way... the main difference between financial spread betting and forex is that financial spread betting offers a wide range of markets, including forex, indices, shares, etc.
Thus if you're interested in trading forex I'd recommend you go for financial spread betting account.
http://www.independentinvestor.co.uk/spread_betting/ - find out more about spread betting and compare dozens of financial spread betting accounts.

Saroman Oct 20, 2014 2:49am | Post# 7

They work in the same way... the main difference between financial spread betting and forex is that financial spread betting offers a wide range of markets, including forex, indices, shares, etc. Thus if you're interested in trading forex I'd recommend you go for financial spread betting account. independentinvestor.com/spread-betting/ - find out more about spread betting and compare dozens of financial spread betting accounts.
financial spread betting is tax free as well.

PS: updated the link

faststare08 Oct 20, 2014 12:20pm | Post# 8

Spread Betting is same CFDs?

Saroman Oct 20, 2014 11:29pm | Post# 9

Spread Betting is same CFDs?
Spread betting and CFDs are almost the same but there are two main difference: spread betting is tax-free (at least in the UK) and with spread betting you trade in the currency of your choice across all the markets whereas with CFDs you trade in the currency of the underlying asset (for example, if you buy FTSE100 shares then you deal in , but if you trade US shares then you trade in $).

faststare08 Oct 22, 2014 5:20pm | Post# 10

{quote} Spread betting and CFDs are almost the same but there are two main difference: spread betting is tax-free (at least in the UK) and with spread betting you trade in the currency of your choice across all the markets whereas with CFDs you trade in the currency of the underlying asset (for example, if you buy FTSE100 shares then you deal in , but if you trade US shares then you trade in $).
CFDs is also tax free?

jhehe Oct 30, 2014 8:29pm | Post# 11

What about the upstream process? Although it probably rarely happens in spot forex, a trade in spot forex can be sent upstream. however, is the broker just taking on the risk on the other side with spread betting?

conrossmac Nov 5, 2014 4:09pm | Post# 12

Do you get taxed over a certain value??? If not - WOW! This is my new adventure.

conrossmac Nov 5, 2014 4:09pm | Post# 13

By adventure i mean Job.

Saroman Nov 5, 2014 7:15pm | Post# 14

you don't get taxed if you spread bet but you do pay tax and cfd and forex trades.

ManBearPig Nov 9, 2014 1:25pm | Post# 15

I have been spread betting for 15 years here in the UK because it's tax free. The only tax that is paid is the profit the broker makes on 'the spread' ie buy at 100 sell at 110 then the spread is 10 which the broker takes whether win lose or break even and he would normally be taxed on that as its counted as profit. We have a similar system for horse racing you can choose to pay tax on the bet say 5.00 + tax and then there is no tax for winnings, you can elect not to pay tax on your bet (horse racing) but you would pay tax on winnings. Like our cricket rules, very British.

nods80 Nov 28, 2014 7:07pm | Post# 16

I have been spread betting for 15 years here in the UK because it's tax free. The only tax that is paid is the profit the broker makes on 'the spread' ie buy at 100 sell at 110 then the spread is 10 which the broker takes whether win lose or break even and he would normally be taxed on that as its counted as profit. We have a similar system for horse racing you can choose to pay tax on the bet say 5.00 + tax and then there is no tax for winnings, you can elect not to pay tax on your bet (horse racing) but you would pay tax on winnings. Like our...
What Broker do you use. I'm looking for a good broker that offer spread betting.

tony6616 Mar 25, 2015 6:23am | Post# 17

what happen to the tax free if i'm not the UK resident?

moonshot Mar 25, 2015 6:12pm | Post# 18

Spread Betting is same CFDs?
No, CFDs have taxes, but traders can use losses to offset profits, while in Spread betting there are no capital gain taxes here is more for key differences and similarities
http://www.ig.com/uk/spread-betting-versus-cfds

WhiteFX Apr 9, 2015 11:36am | Post# 19

There seems to be quite a few mixed messages in here.

Firstly if you spread bet and it is your sole source of income then you do have to pay Tax in the UK. If it is not your sole source of income then you do not have to pay tax.

Spread betting is only available to UK residents.

Different spread betting providers will have different types of accounts... there is not one blanket statement that will accurately describe all spread betting accounts. Some providers can simply put a legal wrapper on a normal FX account like an MT4 account allowing you to trade normally but benefit from paying no tax if it is not your sole source of income. Some other brokers will offer you the more traditional spread betting account where the trade is not determined by the nominal value as with MT4 (the number of lots you are trading) it is determined by the PnL per point that you want to make on the trade. Ultimately both offer you a vehicle for profiting or loosing in the markets but they are just different ways of doing the same thing.

Dyce100 Apr 16, 2015 3:01pm | Post# 20

Hi Guys

I have just finished a course on trading but now looking for a good spread betting brokerage to go with can anyone advise me on any good ones in the UK please.


© Forex Factory