The world of trading offers many opportunities, possibilities, platforms, brokers and products, which sometimes gets hard to find.Among the most well-known terms, CFD (Contract for Difference) is what most often appears. It is the main product of Forex brokers. We find CFDs in virtually any underlying asset, be it currencies, indexes, commodities, crypto derivatives, stocks, among others. From GigaFX reviewyou can have the best options now.
The Other Options
But there is another Anglo-Saxon term that is also often used, the “Spread betting.” In this option, there is something for all tastes again and the spread betting offer is plentiful.
The confusion gets even bigger when most brokers offer the two ways to access markets. And sometimes the individual traders do not even know in which financial instrument they are acting.
- What is the difference between CFD trading and Spread Betting trading?
- How to distinguish products?
- Is it important to differentiate them?
- Which one should I choose for trading?
Spread Betting is indeed really unique in the UK. In Portuguese, “spread” can mean “spread” and “betting” can mean “bet”. In this mechanism, the “bettor” puts a certain amount (in pound sterling) to move the point. It is a bet, more than a negotiation or an investment.
In the case of CFDs, trading depends on the price difference of the underlying asset between the time it opens its position and the time it closes its trading. Your gain or loss will depend on the volume he occupied in the position.
Whether in Spread Betting or CFDs, both instruments make it possible to place high or low bets on a wide range of asset classes, without ever stopping the underlying assets. We can thus bet on the fluctuations of the stock market without necessarily holding these financial securities.The (sometimes exaggerated) use of leverage is also often associated with these financial tools. The potential gains and losses are proportional to the leverage used.