Spread Trading vs Spread Betting

Spread Trading vs Spread Betting

When getting involved in leveraged trading, you are likely to bump into the terms Spread Trading, and Spread Betting.

So, what is the difference?

There is actually absolutely no difference.

Spread Trading and Spread Betting are the same trading product, however in the UK it is referred to as Spread Betting and in South Africa it is referred to as Spread Trading for tax purposes.

Spread Trading profits are exempt from Stamp Duty in both the UK and South Africa. However the UK tax authorities only allow this if this form of trading is classed as 'betting' as betting is a tax free product in the UK. If the clasification were to change in the UK then stamp duties would apply depriving the industry of one of its key advantages over traditional share trading.