CFDs (Contract for Difference)

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On a CFD you are buying shares by putting up a margin and the CFD provider lends you the balance. The CFD provider buys the full amount of shares in the market. You do not actually own the shares although you are entitled to any rights and dividends (calculated slightly differently than normal). You may hold the CFDs as long as you like and there is no stamp duty on purchases.

The costs involved are commission (roughly 0.5%), financing (say 5%) and margin (say 10%).
The financing cost only applies to long positions.
You will notice that there is no stamp duty charged.
The point at which CFD costs outway normal dealing costs is around 67 days.

Gains are subject to CGT and there is a slightly different way of treating dividends than if you were to trade in the actual share.

Read the diary of a CFD trader