Product mechanics
Course context: This lesson belongs to a practical beginner curriculum for Pakistan.
| Feature | Spread betting | CFD |
|---|---|---|
| Position expression | Cash stake per point of movement | Lots or units tied to a contract specification |
| Where commonly encountered | Most closely associated with UK and Irish retail markets | Available through brokers in many jurisdictions |
| Ownership | No ownership of the underlying asset | No ownership of the underlying asset |
| Typical cost fields | Spread, financing and possible product fees | Spread, commission, swap and conversion where applicable |
| Exness availability | Not an Exness product | Exness trading instruments are offered as CFDs |
Why a UK comparison can mislead a Pakistan learner
The UK FCA groups CFDs, spread bets and rolling spot forex within its retail CFD framework. Its UK rules include leverage limits, a 50% margin close-out rule, account-level negative balance protection, restrictions on inducements and a standardized loss warning. Those protections belong to the UK regulatory framework; they cannot be assumed for a Pakistan resident served by a different legal entity.
Compare the same market move
Write both examples in cash terms. A spread bet may be quoted as currency per point. A CFD uses volume, contract size and price movement. Convert both to: cash P/L per price unit × distance to invalidation + opening and holding costs. Only then do the positions have a comparable risk basis.
Pakistan account-verification route
- Confirm that the provider accepts residents of Pakistan.
- Read the account-opening document and identify the contracting entity.
- Verify that entity on the named regulator's own register.
- Check whether the instrument is a CFD, spread bet, security or futures contract.
- Record leverage, margin close-out, negative-balance and complaint terms.
- Calculate spread, commission, swap and currency-conversion cost for one demo position.
Decision worksheet
| Question | Evidence to save |
|---|---|
| What product am I entering? | Instrument specification and client agreement |
| Who is my counterparty? | Legal entity name from registration documents |
| Which protections apply? | Regulator register and entity-specific terms |
| What is one-point exposure? | Platform contract size or stake definition |
| What can one planned trade lose? | Volume, stop distance, slippage allowance and all costs |
Primary references
FCA: contracts for difference retail framework · Exness: available CFD instruments
Questions from a first-time learner
Does Exness provide spread betting?
No. Exness describes its tradable instruments as CFDs; spread betting is a different product format.
Is spread betting tax-free in Pakistan?
Do not transfer a UK marketing claim to Pakistan. Obtain current Pakistan tax advice for your circumstances.
Are CFDs and spread bets equally risky?
Both can create leveraged exposure. Actual cash risk depends on size, margin, stop execution and costs.
Can I rely on UK FCA protections with any broker?
No. First identify the legal entity serving the account and the rules that apply to that entity.