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Contracts for Difference Questions and Answers

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Q. Are there any differences between forex spot trading and trading forex on a CFD account?

Q. What is the difference between spread betting and contracts for difference?

Q. What are best: spread bets or contracts for difference?

Q. Why is direct market access seen as more transparent than spread betting?

Q. But assuming I’m a day trader, would you opt to go through the DMA route or spreadbets?

Q. But aren’t CFDs liable to capital gains tax unlike spread bets?

Q. What are most cost-effective – spread betting, cfds or direct shares trading?

Q. Spread bets and cfds are very similar yet most real traders say spread betting isn’t investing, it’s just a form of gambling – why is that?

Q. So why choose CFDs over spread betting for a person located in the UK?

Q. But I hate having to pay tax!

Q. So should I go with Spread Betting or CFDs?

Q. How are CFDs priced?

Q. What factors determine the bid-offer spread?

Q. Is the FTSE 100/Dow Jones Index quotes linked to the actual index or are they based on the futures market?

Q. I’ve been day trading the FTSE 100 index for the last few weeks and noticed that generally the IG quote is above the actual price?

Q. Why do the prices on the AUS200 CFD move differently to the SPI?

Q. What is the difference between Daily Cash and Daily Future. Does the Daily Future refer to the Rolling?

Q. But isn’t the Daily Cash buying the contract right now at current prices?

Q. Are you able to trade CFDs even after-hours or when the underlying market is closed?

Q. If there is limited liquidity in a market, can you still trade CFDs over that asset?

Q. What about corporate actions?

Q. What happens if a company pays a dividend?

Q. Are CFDs exempt from tax on dividends?

Q. Does a holder of a long CFD receive a dividend and imputation credits?

Q. Does a holder of a short CFD make a cash payment to the value of the dividend and imputation credits?

Q. What about franking credits?

Q. What happens in a stock split?

Q. In case of a rights issue if I buy the rights in CFDs can i take part in the rights exercise?

Q. Can you take or make delivery of a stock by trading a CFD?

Q. Do CFDs give you the right to convert your holdings into actual shares?

Q. If anyone holds shares via CFDs does one have to notify the public through an RNS if their holding goes over…

Q. Yes, I understand that but shares as you know give you entitlement in the say of things…

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