A CFD — contract for difference — is an agreement with a provider to exchange the change in an asset's price between opening and closing the position. A spread bet does the same thing, expressed as an amount per point of movement. Neither gives you the asset itself. You put down margin, a deposit that's only a fraction of the position's full size, so both are leveraged: the gain or loss is worked out on the whole position, not on the deposit.
Providers selling to UK retail clients have to show a standard risk warning that includes the percentage of their retail accounts that lose money, commonly well over half. It's telling you the typical outcome is a loss, which follows from leverage, from costs charged on the full position — spreads, and overnight financing on positions held open — and from the provider often being the other side of your trade. Since 2019 FCA rules have capped leverage for retail clients, required providers to close positions when your margin falls to half the required level, and given negative balance protection, so you can't lose more than the money in your account. You can still lose all of it, quickly.
Losses are worked out on the whole position, not on the deposit.
Educational content only. It is not personal financial advice.