Spread Betting vs CFDs – Difference in Profitability

If we assume that the spread on both is the same, and ignore the fact that CFDs are taxed, whilst spread betting isn't, would you expect the profitability of identical algorithms ran on both to be the same?

For example, if I have an algo that produces £1000 over the course of x months running on the market placing spread betting trades, would an identical algo placing CFD orders produce the same profit? Are there any hidden profit drains that I should be aware of?

As far as I'm aware, the profitability should be the same, because if you spread bet £1 per point, and the market moves 10 points, you make £10. If you buy 1 long CFD contract (at £1), then after 10 points you will also have £10.

If anyone has experience trading both, I would really appreciate if you could clarify this for me.

Thanks very much!

Submitted September 26, 2020 at 07:17AM by ph0ph0
via https://ift.tt/36bhqUi

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