Spread Betting 2024 – Tutorial and Brokers

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Christian Harris
Christian is a seasoned journalist with decades of experience. He transitioned from tech journalism to finance to follow his interest in investing. He has been trading stocks, futures, forex, and cryptocurrencies for more than 5 years, becoming an eToro Popular Investor. With hands-on expertise across various assets, he offers valuable trading insights.
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James Barra
James is an investment writer with a background in financial services. He has worked as a management consultant, where he delivered large-scale operational transformational programmes at some of Europe's biggest banks. James authors, edits and fact-checks content for a series of investing websites.
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Spread betting is a high-risk, high-reward way to speculate on the financial markets. This guide covers everything you need to get started, from explaining spread betting basics to understanding the tax benefits. Additionally, we have compiled a list of the best spread betting brokers.

Best Spread Betting Brokers

These 10 spread betting providers are regulated and offer a wide range of markets, low fees and excellent trading platforms:

Click a broker for details
  1. 1
    Spreadex

    Ratings
    4 / 5
    3.8 / 5
    4.5 / 5
    4 / 5
    3.8 / 5
    4.3 / 5
    4.3 / 5
    4 / 5
    4.5 / 5
    4.5 / 5

    £0
    £0.01
    1:30
    FCA
    Forex, CFDs, Indices, Commodities, Stocks, Crypto, Bonds, Interest Rates, ETFs, Options, Spread Betting
    Spreadex Platform, TradingView
    Cheque, Wire Transfer, Debit Card, Credit Card, Mastercard, Visa
    USD, EUR, GBP, CAD, CHF
  2. 2
    AvaTrade

    Ratings
    4.8 / 5
    4.3 / 5
    4.5 / 5
    3.8 / 5
    4.3 / 5
    4.3 / 5
    4.3 / 5
    4.5 / 5
    4.3 / 5
    4 / 5

    0.01 Lots
    1:30 (Retail) 1:400 (Pro)
    ASIC, CySEC, FSCA, ISA, CBI, FSA, FSRA, BVI, ADGM
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting, Futures
    WebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
    Skrill, Wire Transfer, FasaPay, Mastercard, Perfect Money, Swift, MoneyGram, Credit Card, WebMoney, JCB Card, Debit Card, Neteller, Boleto
    USD, EUR, GBP, CAD, AUD
  3. 3
    Pepperstone
    CFDs and FX are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs.

    Ratings
    4.6 / 5
    4 / 5
    3.8 / 5
    4.4 / 5
    4.4 / 5
    4.6 / 5
    4.3 / 5
    4 / 5
    4.4 / 5
    4.1 / 5

    $0
    0.01 Lots
    1:30 (Retail), 1:500 (Pro)
    FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
    CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
    MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
    Visa, Mastercard, Credit Card, Debit Card, PayPal, Wire Transfer, POLi, UnionPay, BPAY, Neteller, Skrill
    USD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD
  4. 4
    CityIndex

    $0
    0.01 Lots
    1:30 (Retail), 1:50 (Accredited Investor), 1:200 (Sophisticated Investor), 1:300 (Wholesale Investor), 1:400 (Professional Trader). Varies with jurisdiction.
    ASIC, FCA, MAS
    CFDs, Forex, Stocks, Cryptos, Options, Commodities, Bonds
    MT4, TradingView, TradingCentral
    PayNow, Wire Transfer, Mastercard, BPAY, Credit Card, PayID, Debit Card, Visa, PayPal
    USD, EUR, GBP, AUD, CZK
  5. 5
    Trade Nation

    $0
    0.1 Lots
    1:500 (entity dependent)
    FCA, ASIC, FSCA, SCB, FSA
    Forex, CFDs, Indices, Shares, Commodities, Futures, Bonds, Cryptos (Bahamas Entity Only)
    MT4
    Credit Card, Visa, Mastercard, Wire Transfer, Skrill, PayPal, Debit Card
    USD, EUR, GBP, AUD, ZAR, SEK, NOK, DKK
  6. 6
    Vantage

    Ratings
    4.6 / 5
    4.5 / 5
    4.5 / 5
    4.4 / 5
    4.3 / 5
    4.4 / 5
    4 / 5
    4 / 5
    3.6 / 5
    3.9 / 5

    $50
    0.01 Lots
    1:500
    FCA, ASIC, FSCA, VFSC
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds
    ProTrader, MT4, MT5, TradingView, DupliTrade
    Skrill, BPAY, JCB Card, AstroPay, Visa, Swift, Neteller, Wire Transfer, Credit Card, Debit Card, UnionPay, FasaPay
    USD, EUR, GBP, CAD, AUD, NZD, JPY, HKD, SGD, PLN
  7. 7
    FxPro

    $100
    0.01 Lots
    1:30 (Retail), 1:500 (Pro), 1:1000 (Via Prime Ash Capital Limited)
    FCA, CySEC, FSCA, SCB, FSC
    CFDs, Forex, Stocks, Indices, Commodities, Futures
    FxPro Platform, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade
    Wire Transfer, Credit Card, PayPal, Skrill, Neteller, Maestro, Mastercard, Visa
    USD, EUR, GBP, AUD, JPY, ZAR, CHF, PLN
  8. 8
    CMC Markets
    Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when spread betting and/or trading 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.

    Ratings
    4.8 / 5
    4.5 / 5
    4.5 / 5
    4.3 / 5
    4 / 5
    4.5 / 5
    4.5 / 5
    4.3 / 5
    4.1 / 5
    3.7 / 5

    $0
    0.01 Lots
    1:30 (Retail), 1:500 (Pro)
    FCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Treasuries, Custom Indices, Spread Betting
    Web, MT4
    Visa, Mastercard, Wire Transfer, Credit Card, Debit Card, PayPal
    USD, EUR, GBP, CAD, AUD, NZD, SEK, NOK, SGD, PLN
  9. 9
    Markets.com
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

    $100
    0.01 Lots
    1:30
    FCA, CySEC, ASIC, FSCA, FSC
    CFDs, Forex, Stocks, Commodities, Indices, Crypto, ETFs, Bonds, Spread Betting (UK Only)
    Markets.com Web/App Platform, MT4, MT5
    PayPal, Skrill, Neteller, Credit Card, Wire Transfer, Debit Card, iDeal, Sofort
    USD, EUR, GBP, ZAR, SEK, NOK, DKK, PLN, CZK, AED
  10. 10
    IG

    Ratings
    4.9 / 5
    4 / 5
    4.5 / 5
    3.5 / 5
    4.8 / 5
    4.5 / 5
    4.9 / 5
    5 / 5
    4.6 / 5
    4 / 5

    $0
    0.01 Lots
    1:30 (Retail), 1:250 (Pro)
    FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA
    CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
    Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
    PayPal, Wire Transfer, Mastercard, Credit Card, Visa, Debit Card
    USD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD

This is why we think these brokers are the best in this category:

  1. Spreadex - Trade on thousands of financial markets with a bet size from £0.01 and the best margin rates in the industry. Spread bets are tax free in the UK, and Spreadex traders can access the markets via three slick proprietary trading platforms.
  2. AvaTrade - AvaTrade continues to offer spread betting for UK traders via the MT5 platform, with zero tax on profits. There are no extra currency conversion fees on any asset and leverage is available up to 1:30. You can also practice in the free demo account.
  3. Pepperstone - Pepperstone extends financial spread betting services to both retail and professional traders, enabling you to speculate on forex, indices, shares, and more. Additionally, Pepperstone offers comprehensive training resources if you are new to spread betting, helping to facilitate your journey into this tax-efficient form of trading. Pepperstone also now offers spread betting on TradingView, making it one of a handful of brokers that provide this service.
  4. CityIndex - Spread bet on thousands of global markets with no commissions and tight, fixed spreads.
  5. Trade Nation - Trade Nation offers competitive spread betting conditions and transparent fees on hundreds of assets. On the proprietary platform, spread betters also enjoy a user-friendly and customisable interface.
  6. Vantage - Vantage continues to offer commission-free trading on global markets with tax-free profits for traders from the UK and Ireland. Investors can trade spread bets 24/7 and go long or short. Helpfully, you get access to all the same platforms for spread bets, as well as commission-free trading.
  7. FxPro - UK FxPro traders can access tax-free trading opportunities on six asset classes through the broker's EDGE spread betting platform, with leverage up to 1:30. Short-term traders can build a diversified portfolio whilst enjoying zero commissions on spread bets.
  8. CMC Markets - CMC Markets is still one of the few brokers that lets you make speculative bets on financial markets without incurring capital gains tax on your profits. You don’t pay any commission fees for opening or closing positions, either. Its web platform has also won awards for its top-notch user experience.
  9. Markets.com - Spread betting is available for UK residents looking for a more tax-efficient way to trade, with exemption from Capital Gains Tax and Stamp Duty on profits. With a range of asset classes and just a $100 deposit to get started, spread betting at Markets.com should appeal to both beginners and more experienced investors.
  10. IG - IG offers spread betting on thousands of markets, including currencies, indices, shares and commodities - more than almost every alternative. The platform is easy-to-use and feature-rich while returns from spread bets are potentially tax-free for UK traders. There is also no minimum deposit.

Spread Betting 2024 - Tutorial and Brokers Comparison

Spread Betting 2024 - Tutorial and Brokers Comparison
Broker Minimum Deposit Trading Platforms Financial Regulator Our Rating
Spreadex logo £0 Spreadex Platform, TradingView FCA 3.5 / 5
AvaTrade logo - WebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade ASIC, CySEC, FSCA, ISA, CBI, FSA, FSRA, BVI, ADGM 4.9 / 5
Pepperstone logo $0 MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB 4.8 / 5
CityIndex logo $0 MT4, TradingView, TradingCentral ASIC, FCA, MAS 4.4 / 5
Trade Nation logo $0 MT4 FCA, ASIC, FSCA, SCB, FSA 4.4 / 5
Vantage logo $50 ProTrader, MT4, MT5, TradingView, DupliTrade FCA, ASIC, FSCA, VFSC 4.7 / 5
FxPro logo $100 FxPro Platform, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade FCA, CySEC, FSCA, SCB, FSC 4.4 / 5
CMC Markets logo $0 Web, MT4 FCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA 4.7 / 5
Markets.com logo $100 Markets.com Web/App Platform, MT4, MT5 FCA, CySEC, ASIC, FSCA, FSC 4.4 / 5
IG logo $0 Web, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA 4.4 / 5

Spreadex

"Spreadex will appeal to UK day traders who are interested in both spread betting on financial markets and placing traditional bets on sports events. Fees are low on short trades and profits are tax-free on spread bets. There's also a powerful proprietary charting platform, plus £0 minimum deposit required to get started. "

- DayTrading Review Team

Spreadex Quick Facts

Bonus Offer£300 cashback
Demo AccountNo
InstrumentsForex, CFDs, Indices, Commodities, Stocks, Crypto, Bonds, Interest Rates, ETFs, Options, Spread Betting
RegulatorFCA
PlatformsSpreadex Platform, TradingView
Minimum Deposit£0
Minimum Trade£0.01
Leverage1:30
Account CurrenciesUSD, EUR, GBP, CAD, CHF

Pros

  • A rare broker that provides access to lower market cap stocks traded on the AIM
  • There's an excellent range of instruments and trading vehicles for short-term traders
  • There are some attractive new account promotions, including double the odds and matched betting offers

Cons

  • The lack of a demo account will frustrate prospective clients who want to test Spreadex's services
  • The proprietary terminal lacks comprehensive charting features of platforms like MT4 and MT5
  • There's no support for expert advisors or other trading bots

AvaTrade

"AvaTrade offers the full package for short-term traders. There is powerful charting software, reliable execution, transparent fees, and fast account opening with a low minimum deposit."

Rebecca Holden, Reviewer

AvaTrade Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds, Crypto, Spread Betting, Futures
RegulatorASIC, CySEC, FSCA, ISA, CBI, FSA, FSRA, BVI, ADGM
PlatformsWebTrader, AvaTradeGO, AvaOptions, AvaFutures, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
Minimum Trade0.01 Lots
Leverage1:30 (Retail) 1:400 (Pro)
Account CurrenciesUSD, EUR, GBP, CAD, AUD

Pros

  • There's a great range of fee-free deposit methods, including bank wire, credit cards and popular e-wallets like Skrill
  • Day traders can access stable spreads and zero commissions with no hidden fees
  • The broker’s unique risk management tool, AvaProtect, protects against losses up to $1 million and is easy to activate in the platform

Cons

  • It’s a shame that there are no rebate schemes for serious traders looking for additional perks - CMC Markets would be a better choice here
  • There’s an above-average $50 inactivity fee after three months, though this won't impact active day traders
  • Traders from the US are not accepted

Pepperstone

"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."

Christian Harris, Reviewer

Pepperstone Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto, Spread Betting
RegulatorFCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
PlatformsMT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:500 (Pro)
Account CurrenciesUSD, EUR, GBP, CAD, AUD, NZD, JPY, CHF, HKD, SGD

Pros

  • There’s support for a range of industry-leading charting platforms including MT4, MT5, TradingView, and cTrader, catering to various short-term trading styles, including algo trading.
  • Award-winning customer support is available via telephone, email or live chat with response times of <5 minutes during testing.
  • Now offering spread betting through TradingView, Pepperstone provides a seamless, tax-efficient trading experience with advanced analysis tools.

Cons

  • There’s no simplified proprietary trading platform, nor are there any social trading features, which could be a disadvantage if you are new to day trading.
  • Pepperstone’s demo accounts are active for only 30 days, which may not be not long enough to familiarize yourself with the different platforms and test trading strategies.
  • Pepperstone does not support cTrader Copy, a popular copy trading feature built into the excellent cTrader platform and available at alternatives like IC Markets.

CityIndex

"City Index is best for new and intermediate traders looking for a wide selection of assets on user-friendly platforms."

Christian Harris, Reviewer

CityIndex Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Cryptos, Options, Commodities, Bonds
RegulatorASIC, FCA, MAS
PlatformsMT4, TradingView, TradingCentral
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:50 (Accredited Investor), 1:200 (Sophisticated Investor), 1:300 (Wholesale Investor), 1:400 (Professional Trader). Varies with jurisdiction.
Account CurrenciesUSD, EUR, GBP, AUD, CZK

Pros

  • A free demo account with unrestricted access to all markets and trading tools
  • Tight spreads from 0.5 pips on EUR/USD and competitive commissions on CFD shares
  • No minimum deposit to get started

Cons

  • Cryptocurrency trading not available in all locations
  • No Islamic account for Muslim traders
  • $15 monthly inactivity fee

Trade Nation

"Trade Nation is a good choice for newer traders looking for a wide range of financial markets on a user-friendly platform. There is no minimum deposit, free funding options and strong education."

Christian Harris, Reviewer

Trade Nation Quick Facts

Bonus Offer200 Sign-Up Reward Points
Demo AccountYes
InstrumentsForex, CFDs, Indices, Shares, Commodities, Futures, Bonds, Cryptos (Bahamas Entity Only)
RegulatorFCA, ASIC, FSCA, SCB, FSA
PlatformsMT4
Minimum Deposit$0
Minimum Trade0.1 Lots
Leverage1:500 (entity dependent)
Account CurrenciesUSD, EUR, GBP, AUD, ZAR, SEK, NOK, DKK

Pros

  • Multiple account currencies are accepted for global traders
  • The trading firm offers tight spreads and a transparent pricing schedule
  • There is a low minimum deposit for beginners

Cons

  • Fewer legal protections with offshore entity

Vantage

"Vantage remains an excellent option for CFD traders seeking a tightly-regulated broker with access to the reliable MetaTrader platforms. The fast sign-up process and $50 minimum deposit make it very straightforward to start day trading quickly."

Jemma Grist, Reviewer

Vantage Quick Facts

Bonus Offer50% Welcome Deposit Bonus, earn redeemable rewards in the Vantage Rewards scheme
Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, ETFs, Bonds
RegulatorFCA, ASIC, FSCA, VFSC
PlatformsProTrader, MT4, MT5, TradingView, DupliTrade
Minimum Deposit$50
Minimum Trade0.01 Lots
Leverage1:500
Account CurrenciesUSD, EUR, GBP, CAD, AUD, NZD, JPY, HKD, SGD, PLN

Pros

  • There are no short-term strategy restrictions with hedging and scalping permitted
  • The low minimum deposit of $50 and zero funding fees make this broker a great choice for new traders
  • The broker has recently made efforts to expand its suite of CFDs providing further trading opportunities

Cons

  • The average execution speeds of 100ms to 250ms are slower than alternatives based on tests
  • Unfortunately, cryptos are only available for Australian clients
  • A steep $10,000 deposit is needed for the best trading conditions, which include the $1.50 commission per side

FxPro

"FxPro is best for experienced traders looking for wide market access, premium research tools and advanced charting platforms. The competitive fees and fast execution will serve serious short-term traders, whilst the BnkPro investment service will appeal to those looking for long-term e-money solutions."

Jemma Grist, Reviewer

FxPro Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, Futures
RegulatorFCA, CySEC, FSCA, SCB, FSC
PlatformsFxPro Platform, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade
Minimum Deposit$100
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:500 (Pro), 1:1000 (Via Prime Ash Capital Limited)
Account CurrenciesUSD, EUR, GBP, AUD, JPY, ZAR, CHF, PLN

Pros

  • There are 4 superior day trading platforms, including a proprietary solution with over 50 indicators, 7 chart types and an impressive 15 chart time frames
  • There's an interactive learning center for beginners with tests, courses, video tutorials and webinars
  • Thousands of CFDs are available across 6 asset classes with a particularly impressive range of indices and precious metals

Cons

  • FxPro's services are mainly geared towards experienced investors and beginners may find the broker's fees and accounts complex
  • There are only a handful of payment methods available, compared to the 10+ offered at top competitors like AvaTrade
  • The broker charges a $10 inactivity fee after 6 months of account dormancy, though this is more lenient than many brokers

CMC Markets

"With advanced charting tools and an extensive range of tradable CFDs, including an almost unrivalled selection of currencies and custom indices, CMC Markets provides a fantastic online platform for traders of all levels. "

Christian Harris, Reviewer

CMC Markets Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, ETFs, Treasuries, Custom Indices, Spread Betting
RegulatorFCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA
PlatformsWeb, MT4
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:500 (Pro)
Account CurrenciesUSD, EUR, GBP, CAD, AUD, NZD, SEK, NOK, SGD, PLN

Pros

  • CMC Markets is heavily regulated by reputable financial authorities and maintains its stellar reputation, helping to ensure a secure and trustworthy trading environment.
  • CMC offers excellent pricing, including tight spreads and low trading fees for all but stock CFDs. The Alpha and Price+ schemes also offer perks for active traders with up to 40% discounts on spreads.
  • The web platform delivers a fantastic user experience with advanced charting tools for day trading and customizable features, catering to both beginners and experienced traders. MT4 (but not MT5) is also supported.

Cons

  • Trading stock CFDs incurs a relatively high commission, especially compared to the cheapest brokers like IC Markets.
  • Despite improvements, the web platform still requires enhancements to make it as intuitive to trade on as software from rivals like IG.
  • While CMC offers an above-average suite of assets, there is no support for trading real stocks and UK clients can’t trade cryptocurrencies.

Markets.com

"Markets.com is best for active traders looking for a regulated broker with low fees and fast execution speeds of 82ms. Beginners will also enjoy the in-house platform with its user-friendly interface, clear navigation and dynamic charts."

Jemma Grist, Reviewer

Markets.com Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Commodities, Indices, Crypto, ETFs, Bonds, Spread Betting (UK Only)
RegulatorFCA, CySEC, ASIC, FSCA, FSC
PlatformsMarkets.com Web/App Platform, MT4, MT5
Minimum Deposit$100
Minimum Trade0.01 Lots
Leverage1:30
Account CurrenciesUSD, EUR, GBP, ZAR, SEK, NOK, DKK, PLN, CZK, AED

Pros

  • Traders can access the MT4 and MT5 software, which offer dozens of technical tools and a huge online community for scripts, bots and custom tools
  • Markets.com continues to offer a strong proprietary platform with a TradingView-powered charting interface, pro-level technical analysis and custom alerts
  • CFD and spread-betting opportunities are available on multiple asset classes including forex, stocks, ETFs, bonds and indices

Cons

  • The single retail account option doesn't offer traders any choice of trading conditions, or any additional perks for active trading
  • There are no auto or copy trading terminals outside of the MetaTrader platforms, such as DupliTrade
  • Unlike some top competitors like XM, customer support is not available on the weekend

IG

"IG continues to provide a comprehensive package with an intuitive web platform and best-in-class education for beginners, plus advanced charting tools, real-time data, and fast execution speeds for experienced day traders."

Christian Harris, Reviewer

IG Quick Facts

Demo AccountYes
InstrumentsCFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting
RegulatorFCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA
PlatformsWeb, ProRealTime, L2 Dealer, MT4, AutoChartist, TradingCentral
Minimum Deposit$0
Minimum Trade0.01 Lots
Leverage1:30 (Retail), 1:250 (Pro)
Account CurrenciesUSD, EUR, GBP, CAD, AUD, JPY, ZAR, SEK, DKK, CHF, HKD, SGD

Pros

  • The IG app offers a superb mobile trading experience with a clean design that helped it secure Runner Up at our Best Trading App award
  • IG offers an extensive collection of professional and engaging educational resources, including webinars, articles, and analysis
  • The proprietary web-based platform continues to caters to traders of all levels, with advanced charting tools and real-time market data useful for day trading

Cons

  • While there is negative balance protection in the UK and EU, there is no account protection or guaranteed stop losses for US clients
  • Beginners might find IG’s fee structure complex, with various fees for different types of trades or services, potentially leading to confusion or unexpected charges
  • IG applies an inactivity fee of $12 per month after 2 years, deterring casual investors

What Is Spread Betting?

Spread betting is a trading method where you speculate on the price movement of financial assets, such as stocks, commodities, or forex, without owning the underlying assets.

Unlike traditional stock trading, where you buy and own shares, spread betting involves making bets on whether an asset’s price will rise (buying) or fall (selling).

In spread betting, you place a bet on the spread, which is the difference between the buying (bid) price and the selling (ask) price of the asset. You profit or incur losses based on the extent to which your prediction is correct, and your stake size determines the magnitude of your gains or losses.

Spread Betting costs on IG platform
IG – Spread Betting Platform

Spread betting typically involves leverage, allowing you to control a more extensive position with a smaller initial investment. While this can magnify profits, it also escalates potential losses.

The cost of initiating your trade is typically integrated into the spread. As a result, the spread entails buying slightly above the market price and selling slightly below it.

Take the FTSE 100, for example, with a spread of 1 point. This signifies that the buy price is situated 0.5 points higher than the current market price, and the sell price is 0.5 points below. Within this 1-point spread, your broker’s fees for opening and closing your position are encompassed.

In some countries, such as the UK, spread betting offers tax advantages over traditional trading methods.

However, the high level of risk involved, coupled with the use of leverage, means that it’s crucial to understand the markets you’re trading in, employ effective risk management strategies, and be aware of the local regulatory and tax implications.

author image
Christian Harris
Author

What Markets Can You Spread Bet On?

Spread betting allows you to speculate on the price movements of a wide range of financial markets. The markets available for spread betting can vary depending on the spread betting provider and the regulations in your region, but typically include:

Spread Betting Vs CFD Trading

Spread betting and contracts for difference (CFDs) are both forms of derivative trading, but they have some key differences:

Market Access

Spread betting typically offers access to a wide range of financial markets, including stocks, indices, currencies, commodities, and more.

CFD trading similarly offers access to a variety of financial markets, such as stocks, indices, forex, and commodities.

Ownership Of Assets

In spread betting, you do not own the underlying assets. You are speculating on the price movement of the asset without owning it.

CFD trading also does not involve ownership of the underlying asset. It is a contract between you and the CFD provider to exchange the difference in price between the asset’s opening and closing prices.

Trading Mechanics

In spread betting, you bet a certain amount per point move in the asset’s price, and the profit or loss is determined by the number of points the price moves in your favor or against you.

In CFD trading, you enter into a contract with a CFD provider to exchange the difference in the price of the underlying asset between the contract’s opening and closing. Profit or loss is calculated based on the change in price.

Taxation

In some countries, spread betting is treated as a form of gambling and is typically tax-exempt. Profits made from spread betting are not generally subject to capital gains tax or stamp duty. However, it may not be available in all countries.

CFD trading is generally subject to capital gains tax or other relevant taxes, depending on your jurisdiction.

Regulation

Both spread betting and CFD trading are subject to regulation in many countries. Regulatory standards are in place to protect traders and ensure fair trading practices.

Spread Betting Vs Stock Trading

The choice between spread betting and stock trading depends on your financial goals, risk tolerance, and the specific tax and regulatory environment in your jurisdiction.

Spread betting is often favored for its tax advantages and flexibility in trading various markets, while stock trading provides ownership of assets and potential dividends but may come with tax implications.

Spread betting and stock trading differ in several key ways:

Ownership Of Assets

In spread betting, you do not own the underlying assets (e.g., stocks). Instead, you are placing a bet on the price movement of shares.

In stock trading, when you buy shares of a company, you own a portion of that company, with the associated rights and responsibilities, such as voting rights and dividend eligibility.

Tax Treatment

In some regions, spread betting is considered a form of gambling, and any profits made from spread betting are typically tax-exempt. This can make it a tax-efficient option for certain traders.

In stock trading, profits are often subject to capital gains tax, and you may also incur other taxes and fees depending on your jurisdiction.

Leverage

Spread betting often involves the use of leverage, which allows you to control larger positions with a relatively small amount of capital. This leverage can amplify both gains and losses.

Stock trading typically does not involve the same level of leverage. You usually need to invest the full amount to purchase shares, although some brokers do allow the purchasing of fractional shares.

Regulation

Spread betting is regulated in many countries, with rules and standards set by relevant financial authorities.

Stock trading is also highly regulated, with rules and regulations set by stock exchanges and government agencies.

Market Access

Spread betting allows you to speculate on a wide range of financial markets, including stocks, indices, currencies, commodities, and more.

Stock trading involves buying and selling shares of individual companies listed on stock exchanges.

Dividends And Voting Rights

In stock trading, as a shareholder, you may be entitled to receive dividends and have a say in company decisions through voting rights.

In spread betting, you do not have such rights because you do not own the underlying stocks.

Pros & Cons Of Spread Betting

Pros

  • Tax Efficiency: In some regions, spread betting is considered a form of gambling, and any profits made from spread betting are typically tax-exempt. This can provide a tax-efficient way to speculate on financial markets, as gains are not subject to capital gains tax or stamp duty.
  • Leverage: Spread betting allows you to use leverage, so you can control larger positions with a relatively small initial investment. This leverage can amplify potential profits, but it also magnifies losses.
  • Diverse Market Access: Spread betting provides access to a wide range of financial markets, including stocks, indices, currencies, commodities, and more. You can diversify your portfolios and trade multiple asset classes from a single account.
  • Short Selling: Spread betting lets you profit from falling markets by taking short positions. This flexibility enables you to make gains in both rising and falling market conditions.
  • No Ownership Of Assets: When you spread bet, you do not own the underlying assets. This means you can speculate on price movements without the need to buy and hold physical assets, making it a more cost-effective and accessible way to trade a variety of markets.

Cons

  • Tax And Regulatory Changes: Tax laws and regulations regarding spread betting can change over time and vary by jurisdiction. What is currently tax-efficient may not remain so in the future. You should stay informed about the latest tax and regulatory developments in your region.
  • Costs And Spreads: Spread betting involves costs in the form of spreads (the difference between the buying and selling price), overnight financing charges, and, sometimes, platform fees. These costs can eat into profits, and you need to consider them when making trading decisions.
  • Market Volatility: Financial markets can be highly volatile, and this volatility can lead to rapid and significant price movements. You need to be prepared for market swings and have risk management measures in place to protect your capital.
  • Limited Risk Management Tools: While spread betting platforms offer some risk management tools like stop-loss orders, they may not provide the same level of control as other trading platforms. Additionally, during extreme market conditions, stop-loss orders may not guarantee execution at the desired price, potentially leading to larger losses than anticipated.
  • Complexity And Learning Curve: Spread betting can be complex, especially if you are new to online trading. Understanding the mechanics, risk management strategies, and various markets can take time and effort. Beginner traders may find it overwhelming, leading to potential losses due to lack of experience.

How To Start Spread Betting

Let’s go through a detailed example of making a spread bet on oil. Note that this is a simplified illustration, and actual trading involves more complexities and risks.

Step 1: Research And Analysis

Before making a spread bet, conduct thorough research and analysis to understand the market and asset you want to trade. This includes studying the market trends, news, and any other relevant information.

In this example, you believe that oil’s price is going to increase.

Step 2: Choose A Broker

Select a reputable spread betting broker that offers access to the financial markets you’re interested in. These are the key considerations to take into account when comparing providers:

You can then create an account with the spread betting provider. This involves providing personal information, verifying your identity, and depositing funds into your trading account.

IG Group's spread betting platform
IG Spread Betting Platform

Step 3: Place The Bet

Considering that you have a bullish outlook on the price of oil and expect it to rise, you initiate a ‘Buy’ trade with a stake of £2 per point. Under this arrangement, for every point that the price of oil climbs, you’ll gain £2. Conversely, if the price of oil drops, you’ll incur a £2 loss for every point of descent.

The ultimate determination of your profit or loss occurs when you decide to close your position. For example, if the price of oil has surged by 50 points since your initial purchase, your profit would amount to (£2 per point x 50 points) £100. Conversely, if the price had declined by 50 points, you would face a loss of £100.

After closing the position, review your spread bet trade, and assess what went well and what could have been done differently. This analysis can help you improve your trading strategy for future spread betting trading.

Taxes

The tax treatment of spread betting depends on the country and its tax laws. In some countries, such as the UK, spread betting is considered a form of gambling, and any profits made from spread betting are normally tax-exempt. This can make spread betting a tax-efficient option.

In the usual investment scenario, realizing a profit involves selling your security such as shares, and any earnings are subject to Capital Gains Tax (CGT) and Stamp Duty, with the total tax dependent on your capital level and earnings.

However, spread betting works differently since you never take actual ownership of assets. When you close your spread betting position, the profits you earn are entirely yours, free from tax obligations.

For instance, let’s consider you purchased 1,000 shares in a company at £1 each and then closed your position when the share price reaches £1.60, resulting in a profit of £600.

If we assume a CGT rate of 20% and a 0.5% stamp duty, the total tax liability would be 20.5%, equivalent to £123, leaving you with £477.

In contrast, if you executed the same trade as a spread bet, your £600 profit would remain entirely tax-free.

Tax laws can vary significantly from one jurisdiction to another, and they may change over time.

Therefore, I recommend consulting with a tax advisor or financial professional who is knowledgeable about the specific tax regulations in your country to understand how spread betting is treated for tax purposes.

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Christian Harris
Author

Terminology

Below is a spread betting glossary, where you will find a breakdown of all the essential jargon.

Bottom Line

Spread betting effectively reduces the financial entry barrier for beginner traders and provides a diverse alternative market. While the allure and risks of excessive leverage remain a prominent concern in spread betting, the modest initial capital requirement, the availability of risk management tools, and tax advantages render it an attractive option for speculators.

Use our rankings of the best spread betting brokers to get started.

FAQ

How Does Spread Betting Trading Work?

Spread betting is a trading product where you speculate on the price movement of various assets, such as stocks, commodities, or currencies, without owning the underlying assets.

It involves making bets on whether the price of an asset will rise or fall, with profits or losses determined by the accuracy of the prediction.

What Is The Difference Between Spread Betting And CFDs?

Spread betting and CFDs are leveraged financial instruments that allow you to speculate on the price fluctuations of financial markets, but they employ distinct mechanisms.

In spread betting, you place a wager by staking a specific amount per point based on your market prediction, while CFDs involve trading contracts that entail exchanging the price difference of an asset from the moment you initiate the position to when you terminate it.

What Countries Allow Spread Betting?

The UK and Ireland are well-known for offering spread betting, and it is a popular form of trading in these countries. However, spread betting is also available in some other countries, including Australia and South Africa, where it is regulated.

The availability and regulation of spread betting can vary, and it is not currently permitted in the United States.

Is Spread Betting More Profitable Than Stock Trading?

The profitability of spread betting versus stock trading depends on individual trading strategies, market conditions, and risk management.

While spread betting offers tax advantages and the potential for leverage, it also carries higher risks.

How Are Spread Bets Taxed?

This depends on the country. Spread bets are exempt from capital gains tax in the UK, for example, which means you’re not liable for tax on your profits, unlike in traditional share dealing. Additionally, there’s no stamp duty to be paid.

With that said, tax laws can vary depending on your trading frequency and profitability.

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