CFDs vs share dealing

Learn more about the differences between CFD trading and share dealing, and which of them could be right for you.

Are you ready to start CFD trading?


  • Used to trade all sorts of instruments, including shares

  • Free from stamp duty, plus any losses can be offset against profits for tax purposes1

  • Trade using leverage to amplify profits – but losses can also exceed your deposits 

  • Go long and short on a market’s direction

  • Positions are adjusted to offset changes from dividends 

  • Deal around the clock on a number of markets

  • No shareholder privileges

Share dealing

  • Trade shares and ETFs

  • Trade via a stocks and shares ISA or SIPP for tax-free profits1

  • Limit risk to your initial outlay 

  • Deal only on rising prices

  • Receive dividends (if paid)

  • Deal during stock exchange opening hours

  • Receive shareholder privileges, such as voting rights on major company issues

What are the technical differences?

A CFD is a financial derivative that enables you to trade on an asset’s price in the underlying market, without owning the asset itself. It is a leveraged product, meaning you only need to put up a fraction of the full value of the trade – or the ‘margin’ – to gain full exposure. Most CFDs don’t expire, though futures do.

When you deal shares, you take ownership of the shares in exchange for their full value. This means there are no underlying markets, no expiry dates and you may gain shareholder privileges. However, you will also pay stamp duty on each trade, and capital gains tax on any profits, except those made via a tax-free stocks and shares ISA or SIPP.1


An investor’s guide to spread betting

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  • Discover the benefits and risks of spread betting on the markets

  • Take a closer look at our dealing platform and risk-management tools

  • Learn how to identify and act on new opportunities

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Example CFD trade vs share deal

Buying Barclays

CFD trade Share deal

Underlying price

208 208

Our price

208 / 208.1



Buy at 208.1 Buy at 208

Deal size

2000 shares 2000 shares

Initial outlay


(Margin = exposure x 5% margin factor)


(2000 shares at 208p)

Stamp duty

None £20

Capital gains tax

£72 £72

Close price

Sell at 229 Sell at 229



(20.9pt increase x 2000 shares = £418, less CGT)

*Not including commission fees


(4580 – 4160 = 420, less stamp duty and CGT)

*Not including commission fees

Which is best for me?

Both CFD trading and share dealing offer ways to take advantage of price movements in financial markets – and both can be a great fit for your trading strategy. Take a look at the key points below to discover whether CFD trading, share dealing or a mix of the two is the best fit for you.

CFD trading could be for you if...


  • You want to trade a range of instruments simultaneously, including indices, FX and shares

  • You want to offset losses against profits as a tax deduction

  • You want to take advantage of leverage 

  • You want to trade on falling markets as well as rising ones

  • You want access to markets outside traditional dealing hours 

  • You want a corporate or professional trading account

  • You want to use the tax-deductible benefits of CFDs as an effective way to hedge 

Share dealing could be for you if…

  • You want to take advantage of tax-efficient savings accounts and pensions

  • You want to ensure your losses won’t exceed your initial deposit

  • You aren’t yet comfortable with the added risks or complexities of CFDs, and want to learn more about the markets

  • You want to hold the physical shares, and benefit from shareholder privileges

  • You want to receive and compound dividend income

The differences in detail

  CFD trading Share dealing
What is it? Trading a financial derivative – you deal on prices derived from the underlying market, not on the underlying market itself. The buying and selling of physical shares in a company.
Are there expiries? No expiry dates (excluding forwards). No expiry dates.
Do I pay tax?

You don’t pay stamp duty, but you do pay capital gains tax. However, losses can be offset as a tax deduction.

You pay stamp duty on each trade, and capital gains tax on any profits, except those made from trades using a stocks and shares ISA or SIPP.
When can I trade? We offer 24-hour trading on forex and major stock indices. During the underlying market hours for other markets. We also offer weekend trading on selected markets. Only when the related exchange is open.
Do I pay to keep positions open? Overnight funding on all markets, except futures. Rollovers on futures. No.
Does IG profit if I lose?  We profit primarily from commission, spreads and funding, and hedge the majority of net client exposure. We accept a low level of market risk, from which we can make a small profit or loss. The outcome of a client’s DMA trade never has an impact on our profit or loss. We make our money from the commissions you pay on each trade. The outcome of a trade makes no difference to our bottom line.
What kind of trading is it suitable for?






Can I receive dividends? We make a dividend adjustment on equity and stock index CFDs. Yes.
Can it be used for hedging? Yes. Rarely, as other products are more effective. 
Range of markets More than 15,000 markets, including:


Stock indices



DMA forex2

DMA shares

ETFs and ETCs



Spot metals

Soft commodities

Interest rates



Stock index futures

Share forwards

Forex forwards

Daily stock index futures

Daily oil futures

Shares and ETFs only, but more than 9000 from a range of stock indices in local denominations:  
UK indices including:

FTSE 100

FTSE 250

Other small cap UK stocks

US indices including:

S&P 500


Other small cap US stocks

European indices including:




Irish ISEQ

Dutch AEX

The charges A spread on all markets except shares.
We charge a commission on share CFDs, but no spread.
Funding adjustments (excluding futures).
Commission on all trades.
A currency conversion fee on international shares.
Dealing platforms Desktop dealing 
Mobile app (iPhone, Android, Windows) 
Tablet app (iPad) 
MetaTrader 4
Desktop dealing 
Mobile app (iPhone, Android, Windows) 
Tablet app (iPad) 
MetaTrader 4
Direct market access (DMA) Yes, for forex2 and shares. Yes.

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Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.

2 From 2 July 2018, regulatory interventions mean that certain products are unavailable to retail traders. As a result, we can only offer Forex Direct to professional traders. To find out more about this, and to check whether you are eligible for a professional account, please see our professional account page.

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.