Both CFD trading and spread betting are capable of providing the same kinds of advantages to the investor/trader in terms of cryptocurrency, commodities, indices, shares and currencies.

Let’s check out the major differences;

1. In CFD trading you are not the owner of the fundamental security or the underlying asset therefore so you don’t have to pay stamp duty, but you are subjected to Capital Gains Tax. Whereas there is neither stamp duty nor Capital Gains Tax in the UK on the profits earned by spread betting.

2.  CFD trading is available all across the globe to customers, whereas spread betting is available only for residents of Ireland or the UK.

3. Holding costs might be applied along with CFDs whereas holding costs might also be applied to spread betting, but an extra spread is added to the platform which is applied when any order is executed.

4. In CFD trading when trading shares, a commission is charged to the account when an order is executed which is additive to the spread whereas in spread betting there is no addendum commission which is charged.

5. In CFD trading whether you earn a profit or you lose depends on the multiplication of CFD units and the difference between the starting price that is the price when you executed and the exit price whereas in spread betting the loss or gain is decided by the product of your stake and difference between the entering and exiting price. 

6. In CFD trading, to open a position you have to pay a small part of the entire value of trade as the product is leveraged whereas in spread betting to open a position you need to pay a small part of the entire value of spread bet as the product is financially leveraged. 

For Spread Betting, trades are executed simply on Pound per PIP (Percentage in Point). For example, when trading Forex CFDs you are effectively buying and selling units of currency at specified Bid and offer prices these are referred to as Lots (1 rounded Lot of Foreign Currency is 100,00 units of that currency). 

7. CFDs have NO real expiry date (i.e. you have the freedom to hold the position for as long as you want subject to a broker’s condition), whereas in spread betting there is a fixed date of expiry.

8. Compared to CFD trading spread betting is more efficient in terms of tax.

9. In CFD trading, the currency in which trade is done varies according to the market in which buying or selling is done, whereas in spread betting trade will always be in your currency. In other words for CFD trading, you can open a real trading account in multiple-denominated currencies (e.g. if you’re in the UK you can open an account denominated in the US dollar). 

10. Spread betting takes place with the help of a broker on the counter whereas CFD trading can be done directly through the market.

11.  CFD trading losses can be used to compensate against other profits gained from assets, income etc. for Capital Gains Tax whereas in spread betting you cannot use losses to counterbalance profits made from other assets and income. 

Please use the following sites to understand the tax rates and conditions of Capital Tax in your respective USA and UK,

US Investor/Trader
UK Investor/Trader

There are both advantages and disadvantages of CFD trading as well as spread betting, but sometimes spread betting is preferred due to no compensations and low to no taxes on spread bets which are usually applicable to CFDs. There are risks involved where money is involved so be wise.