CFDs and spread bets 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. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Featured brokers appear first.
|Featured Spread BettingBroker||What markets can you spread bet on?||How much are the spread betting fees?||CEO Interview||More Info|
|Go long or short and spread bet on more than 17,000 markets with with IG, the world’s No.1 provider||Spread bet from 0.6 points on key FX pairs like EUR/USD, 1 point on major indices like the Germany 30 and FTSE 100, and 0.3 points on Spot Gold.|| Visit IG
|Spread bet on the price movements of thousands of financial instruments, including indices, currencies, cryptocurrencies, commodities, shares and treasuries.||Competitive spreads on our spread betting instruments, including major FX pairs from 0.7 points, major indices from 1 point and crude oil from 3 points.|| Visit CMC
|Spread bet on 150+ instruments across FX, indices, equities, cryptos, energy and commodities, and more, across three, free powerful platforms||Spreads on our MetaTrader 4 and MetaTrader 5 platforms are variable, with prices coming from many providers and sources to ensure you're getting the best price.||Read Tamas Szabo CEO Interview|| Visit Pepperstone
|Trade one of the widest ranges of spread betting markets including large and small cap shares, indices, forex, commodities, bonds and interest rates.||Spread betting spreads start from just 0.6 pts on EUR/USD, 1pt on UK 100 and 0.4 pts on Gold|| Visit Spreadex
|Spread Betting with City Index provides a tax-free* way to trade over 8000+ global markets.||Fixed and variable spreads from 0.5 points with benchmark UK financing is LIBOR +/-2.5%||Coming Soon|| Visit City Index
City Index Reviews
|Trade over 5,000 markets with Profits exempt from both Stamp Duty and Capital Gains tax within the UK.||ETX offer competitive spread betting costs with major FX pairs from 0.6 pips and spreads on major Indices from 1 pt.||Phil Adler CEO Interview||ETX Reviews|
Watch our video on the pros & cons of financial spread betting with Ryan O’Doherty, Head of Product Development at CMC Markets
We talk to Ryan O’Dougherty from CMC Markets about spread betting, what is spread betting, who it’s for, what are the main benefits, the main risks, the best time to trade, and also, the most common mistakes traders make and how to avoid them.
Welcome to Good Money Guide TV. We’re here with Ryan O’Dougherty from CMC Markets. We’re going to have a quick chat about spread betting, what is spread betting, who it’s for, what are the main benefits, the main risks, the best time to trade, and also, the most common mistakes traders make and how to avoid them. Ryan, how are you? Welcome.
Thanks for having me.
Thank you for joining us. So you’re from CMC Markets.
So just take us quickly through what spread betting actually is.
Spread betting is a very popular way of trading the financial market. So it’s only available here in the UK and in Ireland, and it’s a different way I guess to trading than you’re probably used to when you’re trading physical equities etc., in the sense that you’re trading a number of pounds per point, and that regards to how many points a particular market moves. And it’s multi-asset, so you can trade a whole range of different products; currencies, indices, FX, cryptocurrencies, treasuries, etc. So you get a wide range of products to choose from. But there’s a number of advantages. Spread betting is capital gains tax free so that’s one of the main features and why it’s available only here in the UK and Ireland. But the big advantage is that you can actually benefit from both a rising and a falling market as well. So traditionally, clients are used to physical trading, physical share trading, where they have to wait for the market to go up in value, to profit. With spread betting, you can benefit from both a rising and falling market.
And in terms of risk, what are the main risks involved in spread betting?
Well the other major benefit is that you’re trading on margin. So you only need to put in a small amount of your own capital to take out a much larger position. So that’s great that you can get access to markets that you wouldn’t normally be able to get access to. But then that can amplify your profits, because you’re only putting in that small amount, but your actual exposure is the net exposure of the position. So you can amplify your profits but you can also amplify your losses.
And in terms of who it’s for, I mean who is a suitable customer for a spread-betting broker? Who should be trading? Should an absolute beginner be trading in it? Should you have some experience in the market?
I think it’s for both. Definitely, some experience helps because there are risks associated with spread betting, but it is there for the new trader as well. So there’s a whole lot of tools that clients can use to sort of get familiar with the market. So they can use demo accounts, for example. So they can play around with how to get used to the markets, what sort of risks are involved, how they can place trades, etc. And you can trade in such small amounts. So you can trade in fractional amounts. You can trade 0.1 of a pound per point movement. So you can get into it quite small, and then as your experience grows, you can then start to increase your exposure. So it really is for a good mix of people. And because it’s multi-asset, it attracts a number of different clients from different areas. So you know, you’ve got a lot of the regular traders that trade your FX markets and your indices markets. Then you’ve got clients that have come from physical share trading, coming across into the market and getting familiar with those types of products. And you’ve got the new-wave type of traders coming through that are interested in the likes of cryptocurrencies etc. So it really does cover a wide, broad range of clients.
And obviously, multi-asset means of course you can trade a wide variety of markets, so shares, foreign exchange, cryptocurrency, indices and commodities. Obviously on the CMC Markets platform, what would you say are the most popular markets that your customers trade?
I think the new-wave traders will start with, let’s say, some equity trading, because they’re kind of used to that sort of market base.
There’s a nice news flow.
Absolutely. That familiarity is a really important thing for clients when they come on board. But what we start to see is as clients start to get used to what products are on offer, you’ll start to see them move towards your indices, which is probably the most popular product, because it’s a diversified way of getting access to the market. So you believe the market’s going to go up in value, so you’ll look at a general position in the UK100, for example, or the US30. Then if you use indices, then the next biggest one is FX. I mean the FX market, it’s one of the most liquid markets in the world. There’s a lot of people that trade different currency pairs, the spreads are lower, there’s some real advantages in trading those, and the volatility’s there. So there’s opportunity to profit from those markets.
And as of course, you offer a multi-asset platform, shall we just have a quick look at your platform and you can talk us through how your platform would typically look, where things are and what you can do?
One of the things with platforms these days, you have a whole range of very different platforms out there. And you can see just on the screen at the moment, you’ve got a huge range of features that are available. Now this is probably the more advanced screen, but one of the tools on our platform is that it’s completely customisable, so you can start off with a very basic screen to start with, just have a watch list, some charts and your positions, and then as you start to expand, you’ve got access to a number of trading tools or trade ideas, such as sentiment, what other clients are currently trading at the moment. You’ve got economic calendars, so you can actually see major market events and how that’s going to affect the market.
So that’s in the bottom right.
That’s in the bottom right. And then you’ve got tools like Reuters News, where you can get a constant stream of updates of what’s affecting the market. And you’ve got notification tools as well, so you know, they’ll be a notification pushed to your mobile phone or to your desktop, just to say certain events are happening in the market.
And is that client sentiment sort of top middle right?
The blue and orange bars. That’s really quite a good tool for new traders especially. It’s showing you what other traders are currently doing. So you can start to see whether or not they’re long or short on a particular position. So you can see the UK100 there has got a net long position, so more clients are long on that trade than short. But then if you go down to let’s say the SPX, you’ll see that there’s a net short position, rather than a long.
And I read somewhere you can filter that sentiment down to clients that make money and clients that lose money, so you can look at what traders who are actually making money do.
You’ve got two types. You’ve got all clients and you’ve also got your top clients. So we mix those up a little bit so that clients can see the top clients that have made money over the last three months, what they’re doing. And so you’ve got a whole range. Not just that, it’s position value, as well as number of clients.
That’s interesting. And in terms of sentiment on your platform, do you ever look at how the markets have reacted to your sentiment? Because when I was at Investors Intelligence, we used to run a sentiment indicator called the advisor sentiments indicator. It’s been going since the 1960s and we’d basically look at professional advisor sentiment. And we would say well, everybody is bullish, so everybody thinks the market’s going up. So because everybody thinks it’s going up, it obviously crashes. It’s a contrary indicator and quite a good lead indicator as well.
And it can be. And I think that’s why we broke it down into all clients and top clients as well, so you could really the difference between, you know, what the general populous is doing in regards to whether or not they’re net long or short, but then see what the profitable traders are doing. And you know, being able to compare the difference is actually quite interesting, because quite often, it’ll be the opposite. So that gives the client, especially that hasn’t traded a lot in the past, the ability to sort of say well, actually, maybe the all view is not the right one to go for but the top view is.
Absolutely. Well that’s what makes a market, isn’t it? Difference of opinions.
And also finally,you’ve been with CMC for a long time, you’ve been in the markets for a long time as well. For anyone either thinking of getting into spread betting for the first time, or even for experienced spread betting, in all your time in the markets, what would you say are the top three mistakes that people make when spread betting?
It’s a good point because there’s probably, three that really stick out. The first one is the clients really need to do their research, really understand the products that they’re trading. It’s too easy to go in and just do a quick trade on a particular product, and then lose a certain amount of money on that. You know, it’s worth doing some research.
And then, the next one is really around risk management. So when placing orders, you’ve got a whole range of tools that can help you, you know, prevent risk. So you’ve got your stop losses, you’ve got guaranteed stop loss orders, which protect you against any sort of adverse movements. And a lot of clients don’t place those when they first get on to trading and, you know, can lose a large amount quite quickly when some of these markets are quite volatile.
So definitely the research element and then sort of your risk management tools are really important elements to get right. And then cost is probably the next thing to look at. There’s a number of providers out there in this sort of spread-bet sphere, all offering different spread bet costs associated. Some of them are hidden, some of them are upfront. So just be really aware of what costs are involved in placing a trade, because that eats into your profit. So the more it costs you to place the trade or to hold that position for a period of time, so just really investigate the costs involved.
And on costs actually, it’s quite an important point, I mean the costs of spread betting are built in to the spread, and traditionally, you have your spread cost, which is, you know, the market will be trading at one and two and price will be slightly wider than that, and then also, you have overnight financing costs as well. So just talk us briefly through spread costs and overnight financing as well, because I think it’s important for people to, you know, when customers see a product that doesn’t have any visible costs attached to it, I think it’s important that they understand how.
I totally agree. I think, you know, the spread cost is the number one. So obviously, the difference between the bid and offer price is the spread. So the tie to that is the less the market has to move before you start making a profit. So you want to have a tied spread. So if, for example, FTSE is trading at 7,000 and 7,001, there’s a one-point spread. If you’re trading at £1 a point, that’s initially going to cost you £1 to get into the trade. So that’s your spread cost, and you know, different markets will have different spreads, depending on liquidity. So the more liquid the market, probably the tighter the spread. So that’s the first cost.
Holding costs. So if you hold your position overnight, because effectively, you’re in a margin position or you’re leverage trading, so you’re borrowing.
You’re essentially lending the money.
Exactly. So you’re only putting in a small amount but taking out a much larger position. So effectively, you’re borrowing the rest of the funds. And so if you hold that position overnight, so past 10 pm UK time, you’ll get charged the holding cost. A bit like interest on a loan in any sense. So you’ve got that cost associated as well.
And then you’ve got commission. So on spread bet, you don’t pay commissions, but with regards to equities, what happens is there widen the spread by the value of what that commission is. So you don’t get charged an individual commission cost. You just get a wider spread.
So it varies, based on transaction size…
Absolutely. And the market that you’re trading. So it’s one of those things that you don’t really notice when you first get into trading but worth investigating to make sure you’ve got a good deal.
Well Ryan, thank you very much for your time.
Thanks for having me. No, it’s been a pleasure.
What is financial spread betting?
Spread betting is a way to bet on the rise and fall of the prices of an asset, like a stock, commodity or financial instrument. You do not own the underlying asset but make money by predicting correctly if the value of your chosen asset will rise or fall in a given timescale. You can spread bet on anything from shares to gold and crude, FX or house prices. There are a few key differences between traditional investing. Firstly, it’s a bet so there is no tax on profits. Secondly, you trade on margin as you bet on a per point basis so you can make or lose much more than your stake – which makes spread betting a high risk or high reward product. Many of the spread betting brokers listed in our comparison tables have very good education articles, videos and demo accounts for potential clients to practice on. You can read our guide what is spread betting to get more detail and learn our top tips.
Who are the best Spread Betting Brokers in the UK?
There are quite a few spread betting brokers in the UK and the differences between them run deeper than just the spreads they offer.
For the most part, they offer access to similar markets, with closely competitive spreads and similar analysis and strategic tools. We covered in some depth how you should actually choose the best spread betting broker.
The differences between spread betting brokers generally tends to be in things like; customer service, supporting content and educational tools and the prices they offer, known as the spreads.
Here is a summary of some of the best spread betting brokers,based on more than just the spreads they offer:
The top five spread betting brokers (and what they are good at).
All brokers are not equal. Some are just better at some things than others.
Here's a quick rundown of the key strengths of the top five established spread betting brokers and what makes them stand out.
- Best all round spread betting broker: IG is the largest and oldest spread betting company in the world. Founded in 1974, they are the default spread betting broker for new and experienced traders.
- Research and tools: City Index is one of the most established spread betting brokers and offers a wide variety of webinars, trading tools and indicators on their online platform.
- Best for beginners: ETX Capital are getting better and bigger everyday. They offer some really tight spreads on FX, Index and Equities, even all the way down to AIM stocks.
- Customer service: Spreadex is one of those brokers that people like doing business with. They don't offer the tightest spreads or even the widest range of markets. But, they do offer a slightly more personal service. It's their small brokerage attitude that makes them worth trading through.
- Best for tight spreads: Core Spreads are a new broker that focus on a simple trading platform with tight pricing. If you are new to spread betting always make sure you get lots of information from third parties before trading and keep it as simple as possible.
Spread betting company reviews
If you are looking for a review on the top spread betting firms in the UK you have come to the right place. We only list regulated brokers that offer secure, platforms, tight spreads and quick execution on FX, Equities, Commodities, Indices and Fixed Income:
You can also post your own rating and account review to let other traders know what you think.
We review the best spread betting brokers and look at the top accounts. Our expert reviews are a detailed assessment based on first hand experiences with each of the major spread betting companies.
We also consolidate user reviews so you can read real life trader experiences and get an idea of the best features that each broker offers.
- ETX Capital started life as an institutional FX broker but has focussed on the private client market over the past few years. They offer access to a good range of AIM shares and have a good European reach also. Read our ETX Capital review.
- IG are one of the oldest and biggest of the spread betting world, founded in 1974. Listed on the LSE with a current market cap over £1bn. They provide the widest variety of products as well as a useful insight platform giving customers access to market sentiment data. Read our IG review.
- Spreadex is one of the oldest spread betting companies in the UK. Founded in 1999 they provide a customer service focussed offering on financial instruments and sports spread betting. If the mood takes you they also launched leveraged trading on bitcoin. Read our Spreadex review.
- City Index was one of the pioneers of spread betting in the UK. They have around 400 employees worldwide since starting the business in 1983. Their platform is constantly evolving and they are a very side and flexible product instrument range. Read our City Index review.
- Finspreads is forever known as the beginners spread betting company as they allow clients to trade with as little stake as 10p per point. They are now owned by City Index and as such a fair place to get started if you don’t want to do too much damage.
- Core Spreads offering is pretty simple, no fuss, no bells and whistles, just super tight spreads on the major instruments. Cutting costs has enabled them to offer 0.8 points on the FTSE and from 0.7 points on FX pairs. Read our Core Spreads review.
- FXCM is listed on the NYSE and provide spread betting through the ever popular and adaptable MT4 platform. Although you are limited to trading FX, commodities and indices with some added value tools and research.
- Spread Co offer a personal approach to spread betting with their own platform and dedicated account manager. Their product offering is varied and includes the ability to spread bet on equities. Find out more about Spread Co.
- InterTrader is a relatively new player in the spreadbetting world, but do provide a learn to spreadbet academy as well as a host of other research and trading tools. Find out more about InterTrader.
You can also share your opinion on the best brokers by voting in our broker awards.
How important are tight spreads when spread betting?
Make sure your broker offers tight spreads. The spreads and how tight they are is an important part of trading through a spread betting broker as spreads impact how quickly you can make money.
However, there are other important considerations into account as well. For example; A broker may try to win your business by marketing ultra-tight spreads on a couple of the main products, but then increase spreads on the more exotic asset classes.
You also need to make sure that when you pick a broker which offers consistently tight spreads and not just during normal trading hours. Securing tight spreads when you want to trade are more important to your profits than choosing a broker which offers the cheapest spreads.
Spreads can also vary on asset class. In some circumstances, it may be best to go with a broker that has consistently tight spreads throughout its entire asset class range rather than just on a few key products.
That being said, it ultimately depends upon what and how you trade for example if you only trade two or three indices and FX pairs, then a broker that will give you the lowest trading costs on these assets will likely make the most sense, then use alternative accounts for other instruments.
Choosing a broker which works best for your strategy, your budget, your ambitions and your preferences will be much more beneficial than arbitrarily choosing the tightest spreads.
Comparing tight spreads from spread betting companies
Although they aren't the only consideration to factor in when choosing a spread betting br0ker, tight spreads are certainly an important aspect, which should not be overlooked. When comparing how tight spreads are among spread betting companies you must also look at the overall offering as being taken in by the initial spread may have a detrimental effect on your trading if you are trading exotic products.
The spread betting brokers offer consistently tight spreads:
Can you make money spread betting?
The simple answer to this is yes, of course, you can. Spread betting provides access to an unprecedented range of markets. The simple fact of the matter is that markets do one of two things. They either go up, or they go down. It is the rate at which they do so and whether you pick the right direction that determines if you make money.
Spread betting is not like placing a normal bet where you losses are capped at the initial stake. You are betting a certain amount per point move of an asset.
If the asset is priced at 100 it means that if it goes to 0 and you have bet £1 per point you can lose £100. So for a £1 bet your potential downside is 100x your stake.
On the plus side, if the price goes to 500 you make £400 which is a monster return for a £1 bet. If you don’t know how spread betting works you can read our article on how spread betting works here.
How to make money spread betting
Making money from spread betting isn't something that just happens, you will need to a plan and to stick to a strategy to stand the best chance of making money from spread betting.
You will also need to budget carefully and do your research before you begin.
One of the most important factors in spread betting is choosing a broker you are comfortable and happy with. A good broker can offer much more than just the ability to make trades but also advice, educational tools, strategies and market insights.
There are many factors involved in choosing the right broker, including; liquidity, financial stability, range of markets, spread width and educational and research tools. Read our guide on how to choose the right spread betting broker before you open an account.
Financial Security – a key feature of any spread betting broker…
It goes without saying that you need your spread betting broker you use to be financially secure and established. Before opening an account, always do some background digging into the company as there have been a few examples of spread betting companies going bankrupt and traders having problems getting their funds back. An easy way to keep an eye on a companies financials is to go with brokers that are traded themselves on the London Stock Exchange. Being a public company means that you have to submit financial reports on a regular basis. The share price and market cap are also good indicators of whether or not a company is heading for trouble. If a broker is not listed on the stock exchange you can have a look at their accounts on companies house or on websites like duedil.com. If you are trading through a spread betting white label it’s important to check just what balance sheet you are using, the brand or the underlying provider.
Best MT4 spread betting brokers
MT4 is on the of the best ways to trade FX online, and now many spread betting brokers now offer MT4 as a platform. If you are interested in spread betting on MT4 you can review the best MT4 spread betting accounts here.
Where to get the tightest FX spreads
Spread betting on Forex is all about tight prices, speed and market timing. It is one of the most actively traded markets in the world. Positions are generally turned over much faster than any other asset class and traders aim to take quick profits. Finding a spread betting broker with really tight FX spreads can make a big difference to your profit and loss at the end of the trading day.
Here is where you can compare trading accounts for spread betting on EURGBP and accounts for spread betting on USDGBP currency pairs.
Three brokers where you can spread bet on foreign exchange with rates under 1 pip.
- IG: Despite being the largest and oldest spread betting firm (read IG review), IG can still compete with the nimble upstarts that are trying to win market share on pricing. They offer by far the widest range of markets, but because of their size do widen the spreads on peripheral instruments a little more. As their spreads are variable it also means that when the markets are volatile they could be wider. This is generally just a reflection of the underlying market. Whilst it could be bad for traders in the short term it is an indication that the firm is hedging correctly, which will benefit everyone in the long run.
- ETX (read ETX Capital review) as well as being one of the biggest brokers out there you can also trade a wide range of commodities on MT4 and equities through ETX Trader Pro (the better platform).
- Core Spreads (read Core Spreads review) are all about tight spreads on all markets, not just the major pairs.
None of the above float your boat? Compare all spreadbetting FX accounts here.
Using spread betting as a tool for arbitrage between brokers
Punters have been trying to beat the man for centuries and spread betting is no different. In the case of spread betting brokerage arbitrage appears that the scales are against the customer.
There are countless cases of punters finding loopholes in the dealing systems of various stock and spread betting brokers and (quite innocently) trading to take advantage of them. After all arbitrage between markets is a legitimate trading strategy. However, as with casinos, the house will win when it comes down to it. Don’t bother as this sort of behaviour can be seen as market manipulation and may result in fines from the FCA
Stick to the basic principles of buying low and selling high. It’s not fair but it’s the facts.
Spread Betting on Foreign Exchange, FX or Forex
The FX market is the most traded asset class in the world and one of the most popular asset classes with spread betting brokers. The major pairs offer great liquidity, tight pricing and good intra-day trading ranges. Because of this brokers are able to offer low margin rates, meaning high leverage. So Spread betting on FX is one of the best ways to trade foreign exchange. You can compare the best Forex brokers here.
Regulation and it’s importance for spread betting brokers
Spread betting brokers in the UK is regulated by the FCA and the FSA register provides a database of the company status, the management and also their regulated employment history. By doing a search on the register you can quite easily find out what experience and pedigree the management have. Never, trade with a company that is not regulated by the FCA. Most brokers display their regulatory status in the footer of the website at the bottom. Our spread betting company comparison tables only include spread betting brokers that are regulated.
Welcome offers and trading bonuses in spread betting
Spread betting brokers are regulated by the FCA and are not allowed to offer welcome bonuses anymore. If a broker does offer you a cash bonus for signing up it may be a scam. You can check that a broker is regulated by the FCA on the FCA register. If you think that an unauthorised broker is trying to scam you, you can report them to the FCA.
Range of markets offered by a spread betting account
Some spread betting companies focus on tight spreads on a few key markets. Others focus on providing a good value overall service. When opening a new account, have in mind what asset classes and individual instruments you want to trade. If you are more interested in AIM and small-cap shares you will need a spread betting broker that specialises in them. If that is the case it may well prove beneficial to open a second account with one of the major providers where you can trade pretty much what you want when you want. All brokers will offer the major index, commodities and FX pairs though.
Added value offered by spread betting brokers
Inherently, most spread betting brokers are the same. There is not much difference in spreads, funding charges, range of markets and platforms these days. So one thing to look out for if you are after value (other than tight spreads) is what else you get as part of the account package. Some spread betting accounts provide access to third-party research and analysis services. Some provide direct market access and others are stripped to the bone and offer nothing other than access to the platform. If you are happy to have various screens open then this may appeal, but a quick look at the spread betting account features comparison table should give you a good indication of what additional services spread betting accounts will give you.
Compare Added Value Spread Betting Accounts
If you are looking for a new broker make sure that you choose one that gives you a little more than just tight spreads. Most spread betting brokers are the same underneath the hood so look for one that gives you a trading edge. Undoubtedly an edge can come in the form of sentiment, data, news or analysis. It’s up to you as a trader to find the best edge for your trading.
Here are some spread betting brokers that offer good added value:
- IG - loads of sentiment, data and analysis tools
- ETX Capital - offer regular educational webinars, seminars and tutorials
- Spreadex - have a great reputation for customer service
Spread Betting Broker Reviews
Use our reviews to find out more about brokers you are considering. We combine expert opinion with user reviews to help you find the right broker for you. Remember the spread betting company that is best for you may not be the same as someone else's so take that in to consideration and make your own decision based on what you need most and as always do your own research before committing. If you are new then start small, you can lose more than your initial deposit so get lots of experience before trading up.
Spread Betting Guides, Tips & Strategy
We’ve put together a few spread betting guides that can help you navigate the world of spread betting. The financial markets are difficult to profit from and spread betting is a high-risk leveraged way of speculating that can result in significant wins and losses. Make sure you fully understand the risks involved by familiarising yourself with how it works.
Which is the right spread betting broker for you?
Every trader is different and every spread betting broker is different in small ways. True, most offer the same thing for the same price, but personal preference can make a big difference in how you interact with the trading platform, the brokers and ultimately how you picking the right spread betting broker can affect you win/loss ration of trades.
Some golden rules of day trading via spread bets…
There are some key principles that all spread betting traders should adhere to if they want to make money. Check out our three golden rules to profitable day trading to see if you use these strategies every time you make a trading decision. If not you may find that paying a bit more attention to your strategy, discipline and objectives will make a big difference.
Spread bet trading on the go
It is essential that any broker you use has the ability for you to check and close your positions on the move. You can compare the best Financial Spread Betting Mobile Apps to make sure that you don’t lose touch with the market for the moment. Most brokers still offer dealing support by phone, but with high-risk bets on you need to be connected all the time.
Who are the major players in the spread betting world?
Spread betting is dominated by several firms, but as there are relatively little barriers to entering the market. new firms are cropping up all the time. We’ve put together a quick summary of all the major spread betting brokers in the UK. Good brokers last because they provide good customer service and fair pricing. Being the cheapest is not necessarily the best when it comes to trading.
Here is a quick rundown of the biggest spread betting brokers
Spread Betting on Bitcoin – need we say more
I’m sure your eyes have already rolled over and a nerve is popping in the back of your head at the concept of trading such an unknown instrument. however,if you really must spread bet on bitcoin here is how.
Spread Betting on the volatility of the markets.
There are various indicators that will show you how volatile the market is. In most cases, a moving market is easier to trade than a stagnant one. You can spread bet on market volatility using the VIX, a futures contract based in Chicago. It’s not the easiest indicator to follow or understand but once mastered can be an invaluable tool.
Price differences between spread betting brokers
Today, most brokers spreads and prices will be fairly similar, but on occasion, there may be an opportunity to arbitrage between brokers. But to be honest the way information is distributed and based on how competitive the industry legitimate arbitrage opportunities will be rare.
Spread betting on smaller cap stocks
There are pros and cons to spread betting on the smaller stocks. Obviously, a pro is that if they sky rocket you don’t have to pay tax (at the moment) on your winnings. The cons are that they are illiquid and as such can be very volatile. The best way to spread bet on the AIM market is through a spread betting broker you have a good relationship with and talks to the market directly. Even if you are a big client you may find the dealers get annoying with you. But if you hold the positions long enough you’ll also end up paying a lot in interest overnight funding.
Spread betting on property
It is possible to spread bet on the UK housing market going up or down but only through a small number of brokers. Spreads will be wide and the market does not move much. If you manage to track down a price double check how long it will be honored for and what size you can bet. It may be a good hedge against a property portfolio, but check the funding rates for short positions if that is your intention.
Technical versus fundamental analysis in spread betting
Most spread traders use technical analysis as is provides a good visual representation of the market and is generally more relevant to short term moves. However, it is based on historic events where as fundamental analysis looks at what a company should be worth in the future. Technical analysis vs fundamental analysis in spread betting is a debate that will probably go on for either, but at the end of the day it is down to personal preference.
Profiting from profit warnings
It’s sad but true, there is easy money to be made in the market by betting on a company under performing. They say profit warnings come in threes so there are many bear traders out there stalking the market for potential victims. Shorting stocks is how you use spread betting to bet on a downward market and can be profitable, but beware losses are unlimited. You can only make as much as your stake goes to zero, but in theory a stock price can go on up forever.
Spread betting vs. CFDs (Contracts for difference)
It is easy to see the difference between spread betting and CFDs. CFDs in the UK are for professionals as they provide direct market access and anonymity (to an extent). Outside the UK CFDs are used by private clients as there are no tax benefits.
Hedging with spread betting
No this is actually a valuable application of spread betting. Using spread betting as a hedging tool can be both an efficient way to manage a profitable position for tax purposes.
How does spread betting really work?
Do you really want to know how financial spread betting the markets works? If you do great, but in reality, you make money if you call the market right, you lose if you don’t. Understanding the mechanics of the product isn’t going to help you be a better stock picker.
Training courses to be a better spread bet trader.
If you’ve just asked yourself “Should I enrol on a trading course to learn spread betting?” The answer is no you shouldn’t. You should avoid spread betting all together. It’s a high risk product for high risk experienced investors. Most trading courses are run by people with little or no knowledge of the actual market and let’s be honest, if they were good traders you they certainly wouldn’t be teaching.
Why do most people lose money spread betting?
I’m sure that you’ve read somewhere that most traders who spread bet lose money? But, what is the main reason most spread betting clients lose money? The answer is pretty simple, it involved around getting involved in something with out enough experience. Spread betting is not an easy way to make money, and should not be marketed or promoted as such. It is a facility to bet on the financial markets to be used appropriately. Most brokers do a good job of ensuring that clients have some investment experience before allowing them an account.
The evil B book run by spread betting brokers
The B book has a pretty bad reputation, rather unjustly. It’s a little unfair as the industry wouldn’t exist without it. Some ask how can the B Book Model in spread betting really still exist in the current financial climate? The answer is simple, without it all the brokers would go out of business.
Spread betting brokers actually like it when you make money
Some do anyway. Some spread betting brokers actually love it when you make money! Spread betting is not an evil industry and in fact offers some of the best customer service and retention rates around. Clients can stay loyal to the same broker for decades.
Making money as a spread bet trader
If you’ve just Google "can you make money spread betting"? The answer is similar to whether or not you should go on a training course. The answer is no you can’t. Some people can, but only experienced investors and speculators, will find their way into the 20% of clients that across in the spread betting client universe of around 100,000 clients actually make money.
White label spread betting brokers – any good?
Some yes, some are just pointless. A white label gives established financial companies the opportunity to give their client base an additional service or another way of doing business with them. Many customers in the financial industry are loyal to brands that help them make and save money or provide good advice. However, going with a white label brokers that doesn’t already exist providing their customers with financial services has no value. Better off to go with one of the major providers like:
Read Our Spread Betting Guides & Tips
- Three golden rules to profitable day trading
- The Best Financial Spread Betting Mobile Apps Compared
- If you really must trade bitcoin this is how….
- Spread betting on market volatility using the VIX
- Best way to spread bet on the AIM market
- Spread betting on the UK housing market going up or down
- Technical analysis versus fundamental analysis in spread betting
- Using spread betting to bet on a downward market
- Spread Betting Versus CFDs – What is the difference?
- Using spread betting as a hedging tool
- How financial spread betting markets work
- Should you enrol on a trading course to learn spread betting?
- The main reason most spread betting clients lose money…
- Does the B Book Model in spread betting really still exist in the current financial climate?
- Why spread betting brokers love it when you make money!
- Choosing the right spread betting broker
Vote in the “Spread Betting Broker Awards”
Our spread betting awards include all the major spread betting brokers in the UK. Our judges are a combination of market professionals, clients, traders, managers and investment personalities. On every spread betting broker review, there is a section to write a review and rate a broker based on set criteria. It only takes a few moments to cast your vote and will help highlight the best spread betting accounts, providers and offers in the UK.
Here are 5 of the best spread betting platforms for beginners and why...
If you're looking for the best spread betting platform for beginners we've put together a list of the top 5 brokers and more importantly reasons why they are good.
Spread betting is a highly regulated financial product and profits are free of capital gains tax. However, if you're new to spread betting here's what you need to look out for.
First, what are the top five brokers for spread betting beginners:
Three simple spread betting strategies to get you started
Strategy is key to spread betting. Having a clear idea of how you want to trade will give you the best chance of maximizing profits and reducing losses. If you are just getting started in spread betting and looking for basic strategy that promotes good trading we've put together a quick summary of three simple spreads betting trading strategies that should help you find your feet. Here are three strategies to get started on the right track:
1) Never over trade.
It's temping to smash straight into the market and trade as large as possible. But this is the quickest way to lose your money. When you get started bet small relative to your account size. This means if you have £1,000 on your account allocate no more than 10% of that to the margin of each trade and keep at least 50% free for variation margin (covering your profit and loss). The principle is the same if you are trading with £100k. You shouldn't use more than 50% or £50k as initial margin, or have a single position that accounts for more than 10% of your account. Spread betting brokers provide access to well over 3,000 instruments to trade and having a diverse range of positions will spread your risk. If you have too fee large positions and one moves against you it can quickly wipe out your account. Having lots of small positions will help you manage your profit and loss more effectively.
2) Cut your losses, run your profits.
The last point in never over trading bring us on nicely to the most important part of spread betting strategy. Always cut a losing trade and run profitable ones for longer. The best traders in the world only get it right about half the time, but what makes them good traders is that they are not in a rush to take profits and realise when they have called the market right to let a position run and bank big wins. If you call a trend or reversal well, there is more to be gained from adding a trailing stop and profit limit tan taking a quick turn and looking for another opportunity. Equally important is cutting losses. As with profitable trades where letting it run make big profits. With losing trades, letting them run will run up big losses. If a position or trade is not doing what you hoped, cut it out and keep your power dry and move on to the next trade.
3) Choosing the right spread betting broker
As spread betting is commission free (the charges are built into the spread and overnight fee) it's easy to become complacent about which broker you use. Tight spreads and low financing charges are the key to efficient trading. If you are jobbing in and out of positions everyday trading with a broker that offers even slightly tighter spreads can increase your profits by up to 20%.
Here's a reason why each of these spread betting brokers are good for beginners:
- ETX Capital: a good all round broker for online execution. ETX is all about quality and robust technology. ETX's TraderPro offers a simple interface with access to over 5,000 markets. ETX offer a range of education including webinars, seminars and an advanced education course which are all FREE to ETX Capital account holders. To top it off, ETX won the “Best Education” award at the 2018 Online Personal Wealth Awards. Founded in the 1960's, ETX is one of the oldest spread betting brokers around. Read 30+ ETX client reviews here
- IG: put simply they are the biggest spread betting and CFD broker in the world. They are listed on the London Stock Exchange and are currently valued at over £3bn. If you plan on becoming a full time professional trader or have a very large amount of money to trade with their platform and staff can cater for your needs as your trading progresses. Read our expert and IG client reviews here
- Spreadex: nice old school broker. Based in St Albans, just outside of London. Helpful staff, excellent customer service and a simple to use platform. Spreadex also have one of the largest market ranges allowing new traders to experiment with all sorts of trading from small caps, to crypto to fixed income. Plus you can spread bet on the horses and foot ball at the weekend with their sports spread betting offering. Read our expert and Spreadex client reviews here
- Core Spreads: as the name suggests they focus on trading, no bells and whistles or add ons. Just a simple to use platform with really tight spreads. Read our expert and 30+ Core Spreads reviews here
Best spread betting brokers for HNWs with large accounts
- IG – of course being the oldest and biggest spread betting firm are a clear choice for HNW (high net-worth) clients. They have a huge balance sheet and are also listed on the LSE, so it should be very clear if the firm is having difficulties.
- Spreadex is one of the most well established spread betting brokers. They launched in 1999 and probably offer the widest range of markets, phone trading and excellent personal service. You can read our interview with Spreadex CEO Jonathan Hufford
Comparing other types of FCA regulated UK brokers
When looking for a new broker there are a few important factors to consider. The most prevalent being that they offer cost-effective access to the markets and asset classes you want to trade. But you also need to consider the regulatory status of the broker, the trading costs, what added value they offer and how financially secure they are.
In our broker comparison pages we'll take a look at the top FOREX, CFD, spread betting, MT4, binary and currency brokers that are regulated by the FCA and what makes them stand out above the competition.
- Spread betting brokers are one of the most cost-effective ways to trade the financial markets. Clients can speculate in the form of a bet per point based on price movement. As you are betting on a move and don't actually own the underlying instrument profits are currently free of capital gains tax. All charges are built into the quoted spread which is generally a little wider than the bid/offer in the market. Take a look at the top spread betting brokers in the UK here.
- Forex brokers offer access to the Forex market which is the most heavily traded financial market in the world with over $4 trillion traded on a daily basis. The Forex market is so popular because it trades 24 hours a day 5 days a week. There is a constant news flow in all times zones, providing excellent liquidity and volatility in the major FX pairs. The key to finding a good Forex brokers is a combination of low margin requirements, tight currency spreads and robust trading platform.
- MetaTrader 4 brokers or MT4 is one of the most popular trading platforms for retail clients globally. It is currently offered by over 600 brokers to their customers. The platform is highly customizable and gives access to over 10,000 assets (depending on your broker). Two of the key features are the ability to trade from charts and follow expert advisers. These expert advisers are usually based on automated technical signals generated from the MetaTrader 4 platform. Compare MetaTrader 4 brokers here.
- Contracts for Difference (CFD) brokers provide access to the financial markets through derivatives. That being a product that is derived from an underlying asset. When you trade contracts for difference you are entering into a contract based on the difference between the opening and closing price of an asset. CFDs are one of the most popular ways to speculate on the financial markets but the quality of CFD brokers varies dramatically - you can see the top CFD brokers here.
- Direct Market Access (DMA) brokers offer direct market access to stock and futures exchanges. DMA brokers are more appropriate for professional or high-frequency traders where pricing is of paramount importance. By using a DMA brokers you can buy cheaper and sell higher than other traders by putting your orders directly on the exchange order book inside the bid/offer spreads. DMA is an essential tool for working larger orders in illiquid markets and can end up saving traders a considerable amount over the course of an account..
- Currency brokers offer bank beating exchange rates when converting money from one currency to another. Bank can charge up to 5% to send an international money transfer but by using a foreign exchange specialist you can save a huge amount of money. Currency brokers also offer foreign exchange forward contracts for businesses or individuals to lock in current rates for future purchases.
Key features of spread betting
- Tax free profits
- Trade on margin
- No stamp duty on stocks
How to choose a financial spread betting broker
There are a few key features to look at when switching or opening a spread betting account. These include:
- Mobile Apps
- Market Range
- Added Value
- Credit Accounts
- Social Trading
By ensuring your spread betting broker is fully authorised and regulated by the FCA some of your funds will be protected under the FSCS. The FCA also requires spread betting brokers to report on a regular basis and have adequate compliance procedures in place to treat customers fairly.
Good Money Guide only shows brokers who are authorised and registered with the FCA and as such, offer FSCS protection for their customers money.
Check how wide a spread betting broker's spreads are
Our spread betting broker comparison tables highlight how wide a companies spreads are. This is important because it is a big cost to you as a trader. The narrower a companies spreads are the lower your trading costs will be. A spread is the difference between the price at which you can buy and sell a position. So if you are a intraday trader who makes lots of trades this can have a bit impact on your profit and loss.
Check you can trade with a spread betting broker on the go?
Most spread betting brokers will have multi platform and mobile and tablet apps for trading on the go. As more volume goes through on mobile broker apps and mobile access ensures that you are always connected to the market to check prices and open and close positions.
Check what asset classes your spread betting broker covers
Some broker solely focus on one product like FX, others cover the entire market. Generally the bigger the broker the more stocks and asset you can trade. The majority of spread betting activity is on the major stocks, FX pairs and indices, but by switching to a broker with better market coverage there will be no delay on putting a trade on an obscure stock or index if the opportunity presents itself.
Experience matters when spread betting
The more established a spread betting broker the better they will be at dealing with customer issues. The financial markets are vastly complex so having experienced brokers and customer service staff is vital to sorting trading errors and helping you navigate new products.
Go with a spread betting broker that offers added value
Most brokers offer pretty much the same access to the market. By choosing a spread betting broker will lots off added value tools like live news, technical analysis and sentiment indicators you will get a better overview of the market and hopefully be better informed when you trade.
Does your spread betting broker offer credit
Some brokers offer credit accounts. This means if you are a good client you can put a trade on without having any cash in your account. You will have to fund the account, but by having a bit of credit it means you can put a trade on quickly without having to wait for funds to be added.
Social trading is bug business now. It basically allows you to execute the same trades as the best customer of a specific broker. If a broker allows social trading they will show th performance and trades of traders that make money. You can then allocate a certain amount of capital to follow their real live positions.
Which are the best spread betting platform for beginners?
This is a tricky question as there is no one size fits all spread betting broker for beginners. If you want to find out which best spread betting platform for beginners you can read one of our guides. But beware, if you are a beginner spread betting, although it has high rewards is very risky. So make sure you fully understand how spread betting works before you start trading.
Do we have a list of spread betting forex brokers?
Yes we do, you can read our page on spread betting forex brokers to find out which spread betting broker offers the best markets, forex spreads and added value for your forex spread betting. As always when you are looking for a spread betting forex broker make sure they are regulated by the FCA and listed on the Good Broker Guide.
Why is spread betting UK exclusive?
Spread betting in the UK is only possible because there is no capital gains tax on spread betting profits. This does of course mean that you cannot offset spread betting losses and tax laws can and always will change. Spread betting outside the UK does not exist as UK spread bettors are the only traders than benefit from the tax breaks.
Financial spread betting versus sports spread betting.
There is only one financial spread betting broker that also offers sports spread betting. That financial spread betting broker is Spreadex. Many other spread betting brokers used to offer sports spread betting, but now it is just Spreadex. Sports spread betting is a bit like trading the financial markets through financial spread betting, but instead of betting on the price of shares, forex and commodities, you are trading sports scores.
Do brokers still offer spread betting offers?
Not really, spread betting offers don't really exist anymore as the regulators through the spread betting offers that brokers were offering were attracting the wrong sort of client to spread betting. Instead, now brokers have to provide a better service, tighter pricing, and access to more markets. So actually, the reduction of spread betting offers is a good thing for traders.
Which is the best spread betting platform?
Many financial websites give out awards to the best spread betting platforms each year. However, take them all with a pinch of salt, many of these award ceremonies tend to give awards to all brokers in one way or another in exchange for sponsorship. However, Good Money Guide's annual awards are different.
We run an annual, unbiased and independent awards ceremony and decide the winners based on;
- personal experiences of testing and using the brokers
- an independent panel of industry expert judges
- your customer feedback and votes
- overall reputation within the industry, their innovation and approach to customer service
Do you have a list of mt4 spread betting brokers?
Yes, you can view our mt4 spread betting broker comparison page for more information on spread betting brokers that offer spread betting on the MT4 platform. Most decent spread betting brokers will have their own trading platforms, but, because of the massive appeal of MT4 good spread betting brokers will also offer this as an option.
- Ten Good Reasons To Try Spread Betting
- The Potential Risks
- Making A First Trade
- Positive Thinking – Going Long
- Going Short – Winning A Trade From A Falling Market
- 5 Ways To Make A Profit From The Market
- Spread Betting's Hidden Costs
- Choosing The Right Provider Of Spread Betting Services
- Glossary Of Spread Betting Terms