Spread betting vs CFDs for UK signal followers
If you live in the UK and follow forex or gold signals, your broker will usually offer two ways to trade the same idea: a spread bet or a contract for difference (CFD). The signal does not change. The entry, stop loss and targets are the same. What changes is how you size the position, how costs are charged and how any profit is taxed.
This guide compares the two side by side for someone following Forexuro signals. It is education, not advice on which product suits you.
Spread betting vs CFDs at a glance
| Spread bet | CFD | |
|---|---|---|
| How you size | A stake in pounds per point of movement | A number of lots or units, with profit and loss in the quote currency, usually converted to pounds |
| Main costs | The spread, plus overnight funding on positions held past the daily cut-off | The spread and, on some accounts, a commission, plus overnight financing |
| UK tax on profits (individuals) | Not normally taxable, and losses get no relief | Normally within Capital Gains Tax, and losses can be offset against gains |
| FCA retail protections | The same for both: leverage limits, margin close-out at 50%, negative balance protection and a standard risk warning | |
| Who can use it | Mainly UK and Irish residents | Widely available |
How sizing works when you follow a signal
Every Forexuro signal gives an entry, a stop loss and targets. The distance from entry to stop, measured in pips, is what you size from. You decide how much you are prepared to lose if the stop is hit, then divide.
Free on Telegram. New members currently get free signals on joining, so you can practise sizing them as a spread bet or a CFD.
Free, opens TelegramSpread bet example on EUR/USD
Say a signal has a 25 pip stop and you decide to risk £50. If your provider treats one point on EUR/USD as one pip (0.0001), the stake is £50 ÷ 25 = £2 per point. If the stop is hit you lose about £50 plus costs. If price moves 40 pips your way you make about £80 before costs. There is no currency conversion because the stake is already in pounds.
CFD example on EUR/USD
On a CFD account one standard lot of EUR/USD moves about $10 per pip. Your £50 risk has to be converted to dollars first. At an illustrative GBP/USD rate of 1.30, £50 is $65, so the size is $65 ÷ (25 pips × $10) = 0.26 lots. Our position size calculator and pip value calculator do this conversion for you with live rates.
Gold is where most sizing mistakes happen
On XAU/USD Forexuro counts one pip as 0.10, so a 5.00 dollar move is 50 pips. On a CFD, one lot is usually 100 ounces, so that 5.00 dollar move is about $500 per lot. On a spread bet, providers do not agree on what one point of gold is: some use 0.1 and others 1.0. Read your provider's market information sheet before you place a stake, and check the size on the gold pip value table or the gold position size calculator.
Costs and why your result will differ from the published pips
Forexuro publishes results in pips between published prices. Those figures exclude spread, commission, overnight financing and slippage, as explained in our methodology. Whichever product you use, your own result will differ.
- Spread bets usually build the cost into the spread, so there is no separate commission. Positions held overnight pay or receive funding.
- CFDs may be spread only or a tighter spread plus commission. Overnight positions pay or receive financing, sometimes called a swap.
- Both can fill at a different price from the one you clicked in fast markets. See slippage.
Tax: the headline difference
For most individuals, HMRC does not treat a spread bet as trading. HMRC Business Income Manual BIM22015 says that a person placing a spread bet is not normally carrying on a trade, so they are not taxable on the profits and get no relief for losses. BIM22020 explains that the position can be different where the bets arise from carrying on a trade.
Retail CFDs are treated as financial futures. HMRC Capital Gains Manual CG56100 says that, unless profits are taxable as trading income, the outcomes are charged under the capital gains regime, with commission and financing included in the calculation. That means gains above the annual allowance can be taxable, but losses can be set against other gains.
Neither point makes one product better. Tax-free profits only matter if there are profits, and the ability to use losses only matters if there are losses. Our guide Is forex trading taxed in the UK? covers the rates and reporting in more detail.
General information only, not tax advice. Tax treatment depends on your individual circumstances and can change in any Budget. Figures are taken from GOV.UK for the 2026 to 2027 tax year as at 26 October 2026. Speak to a qualified tax adviser or HMRC about your own position.
FCA protections apply to both
Since 2019 the FCA has applied the same retail rules to CFDs, financial spread bets and rolling spot forex sold in or from the UK. Under the FCA rules for CFDs and similar products, firms must:
- limit leverage to between 30:1 and 2:1 depending on the asset, which in practice means 30:1 on major currency pairs and 20:1 on gold
- close out positions when your funds fall to 50% of the margin needed to keep them open
- make sure you cannot lose more than the funds in your account
- show a standard risk warning with the percentage of their retail accounts that lose money
These protections only apply if your provider is authorised by the FCA. Check the firm on the FCA Financial Services Register before you deposit. Our guide to choosing a forex broker for signals lists what else to look at.
Which is easier for following signals?
Practically, a spread bet is often simpler for a UK signal follower because the stake is in pounds per point and there is no currency conversion. A CFD account is closer to how most charting platforms and calculators quote size, and it is the same product used by traders outside the UK. Many UK brokers offer both under one account, so some people try each on small size and keep the one whose sizing they find clearest.
Whichever you choose, the discipline is the same: size every trade from the stop, keep risk per trade small, and never move the stop further away. You can see each signal's entry, stop and targets for yourself when you join the free Telegram channel, and every closed trade is listed in the trade history.
Frequently asked questions
Is spread betting tax free in the UK?
For most individuals, HMRC does not treat spread betting as trading, so profits are not normally taxable and losses get no relief (HMRC Business Income Manual BIM22015). It can be different if the bets arise from carrying on a trade, and tax rules can change. This is general information, not tax advice.
Are CFD profits taxed in the UK?
Retail CFDs are normally within Capital Gains Tax unless the profits are taxable as trading income (HMRC Capital Gains Manual CG56100). Gains above the annual allowance can be taxable, and losses can be set against other gains.
Can I follow Forexuro signals with a spread bet?
Yes. The entry, stop loss and targets are the same whichever product you use. Only the sizing differs: with a spread bet you choose a stake in pounds per point, so check what one point means for each market at your provider.
Is leverage different for spread bets and CFDs?
No. The FCA applies the same retail leverage limits to both, from 30:1 on major currency pairs to 2:1 on the most volatile assets, with 20:1 on gold.
Which is cheaper, spread betting or CFDs?
It depends on the provider and the account. Spread bets usually charge through the spread, while CFD accounts may charge a tighter spread plus commission. Both charge overnight funding. Compare the full cost on the markets you trade.
Keep reading
Is forex trading taxed in the UK? · Lot size calculation explained · Position sizing for gold · Copy trading vs signals
Education only, not financial advice. Trading forex, gold and CFDs carries a high risk of losing money, and leverage magnifies both gains and losses. Past performance is not a reliable guide to future results. Read our risk disclosure.