Best Spread Betting Brokers & Platforms

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Spread betting brokers let you speculate on the price of shares, indices, commodities, forex and fixed-income markets going up or down through financial spread betting. Financial spread betting platforms are unique to the UK as trades are structured as bets on a value-per-point movement basis and there is no capital gains tax due on profits.
✅Good Money Guide has tested and ranked the best spread betting brokers in the UK to help you choose the most appropriate platform for your trading strategy. 

City Index: Best Spread Betting Broker For Trading Signals & Post-Trade Analysis

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City Index
  • Spread betting markets available: 12,000
  • Minimum deposit: £100
  • Equity overnight financing: 2.5% +/- SONIA
  • Pricing: Shares 0.08%, FTSE 1, GBPUSD 0.9
  • GMG rating:
  • Customer rating: 3.6/5 (97 reviews)

69% of retail investor accounts lose money when trading CFDs with this provider

City Index Spread Betting Review
City Index

Name: City Index Spread Betting

Description: City Index is one of the best spread betting brokers and is suitable for all types of traders looking for a tax-efficient way to speculate on the financial markets. City Index also won our “best trader tools” award in 2023.
70% of retail investor accounts lose money when trading CFDs with this provider.

Is City Index a good spread betting broker?

Overall City Index’s spread betting platform is one of the best around with competitive pricing, a wide range of markets to trade, and some very good added value tools to help traders seek out opportunities and improve their trading strategy.

  • Spread betting markets available: 12,000
  • Minimum deposit: £100
  • Account types: CFDs & spread betting
  • Equity overnight financing: 2.5% +/- SONIA
  • Pricing: Shares 0.08%, FTSE 1, GBPUSD 0.9

Spread bets at City Index are available on 12,000 markets including, 23 equity indices, thousands of UK and international stocks and ETFs, 19 commodities, bonds, and interest rates, and an industry-leading 182 FX pars. City Index also has an options desk for spread betting on index and populare stock options.

When I tested City Index’s spread betting account there were two things that made it stand out, SMART Signals and Performance Analytics.

SMART Signals, is one of the best trading signal services out there and is developed in-house by City Index. The idea is that the algorithm scans the market for price patterns and highlights upcoming trading opportunities. It differs from the standard offerings from Autochartist and Trading Central, by being fully integrated giving you the ability to trade via a single click, as well as being fully transparent by displaying the previous P&L per asset.

The other spread betting tool, that is unique to City Index is Performance Analytics. Whilst other brokers provide post-trade analysis, When StoneX (City Index’s parent company) acquired Chasing Returns, they were able to exclusively provide a huge amount of data to help their customers stick to a trading plan and provide insights into what can make them a better spread bettor.

As with most spread betting brokers, City Index clients trade via two-way bid-offer prices the difference between the bid and offer representing the spread. These vary by product and contract but in the FTSE 100 index City charges a minimum spread of 1 index point and on the Germany 30 or Dax it charges 1.20 points. You can trade Spread Bets on leading equity indices up to 24 hours per day. For stock trading, spreads of 0.8% for UK and 1.8 cents per share are built into the price.

City Index Spread Betting platform


  • Wide range of spread betting markets
  • Trading signals
  • Post-trade analysis


  • No DMA spread betting
  • No investing account
  • Pricing
  • Market Access
  • Online Platform
  • Customer Service
  • Research & Analysis

Pepperstone: Best Spread Betting Platform For MT4/MT5

  • Spread betting markets available: 1,200
  • Minimum deposit: £1
  • Equity overnight financing: 2.5% +/- SONIA
  • Pricing: Shares 0.1%, FTSE 1, GBPUSD 0.9
  • GMG rating:
  • Customer rating: 4.6/5 (78 reviews)

75.3% of retail investor accounts lose money when trading CFDs with this provider

Pepperstone Spread Betting Review

Name: Pepperstone Spread Betting

Description: Pepperstone introduced spread betting in early 2021 with a focus on tight pricing for major instruments and automated trading on through trading platforms.
75.6% of retail investor accounts lose money when trading CFDs with this provider.


Overall, Pepperstone is a good choice for clients that want to spread bet on MetaQuotes as it’s MT4 & MT5 package is one of the best around. Plus Pepperstone are one of only two brokers that offers spread betting through TradingView.

  • Spread betting markets available: 1,200
  • Minimum deposit: £1
  • Account types: CFDs, spread betting
  • Equity overnight financing: 2.5% +/- SONIA
  • Pricing: Shares 0.1%, FTSE 1, GBPUSD 0.9

Pepperstone operates a tiered approach to spread betting accounts. Newer clients typically joined Pepperstone’s standard accounts; more experienced traders can elect to join the firm’s Razor account. The latter is used mainly for scalping and algorithmic trading. As seen below, Razor accounts have lower spreads than standard accounts in the FX markets but they also incur some commissions.

Pepperstone does not charge an inactivity fee, which is excellent for low-latency traders. The firm has no regular maintenance fee like some investment accounts. There is no minimum deposit either.

In the UK, Pepperstone offers protection on negative balance for retail clients only. This means that should the market swing violently against you and wipe out your risk capital, your account will not go below zero. Professional accounts, however, will be required to post additional equity and can go into negative equity.

For funding, Pepperstone accepts Visa, MasterCard, Paypal or bank transfers.

Most withdrawals are free, although international Telegraphic Transfer (TT) may incur fees by the banks which will be passed on to clients.

Pepperstone spread betting platform



  • Good MT4 spread betting broker
  • Low minimum deposit
  • Excellent package of indicators
  • Spread betting on TradingView


  • Limited market range
  • No options spread betting
  • Pricing
  • Market Access
  • Online Platform
  • Customer Service
  • Research & Analysis

CMC Markets: Best Spread Betting Trading Platform For Sentiment Indicators

CMC Markets
  • Spread betting markets available: 12,000
  • Minimum deposit: £1
  • Equity overnight financing: 2.9% +/- SONIA
  • Pricing: Shares 0.1%, FTSE 1, GBPUSD 0.59
  • GMG rating:
  • Customer rating: 3.7/5 (146 reviews)

74% of retail investor accounts lose money when trading CFDs with this provider

CMC Markets Spread Betting Review
CMC Markets

Name: CMC Markets Spread Betting

Description: CMC Markets pioneered electronic trading in the UK during the early 1990’s and introduce financial spread betting to complement its CFD and forex trading in 2001. Since then the Market Maker spread betting platform has evolved into the “Next Generation” platform and is one of the best proprietary trading platforms for active traders in the industry.
74% of retail investor accounts lose money when trading CFDs with this provider.


Overall, CMC Markets is an exceptional spread betting platform with innovative features suitable to frequent traders wanting to trade on tight spreads.

  • Spread betting markets available: 12,000
  • Minimum deposit: £1
  • Account types: CFDs, spread betting
  • Equity overnight financing: 2.9% +/- SONIA
  • Pricing: Shares 0.1%, FTSE 1, GBPUSD 0.59

CMC Market’s spread betting offering has always won business by producing great technology that reduces the cost of trading. By focussing on mobile and online trading, they now see over 70% of spread bets go through on mobile versus online.

I found that CMC Market’s spread betting prices were always tight and hail from the original online platform name (Deal4Free, and slogan “compare the spread”). CMC Markets also invented the concept of the daily cash rolling spread bet so traders no longer need to trade the futures price, reducing trading costs further.

Whilst CMC Markets focus on the major markets, they do actually offer access to quite a large amount of assets, over 12,00 including an industry-leading 338 fx crosses (CMC did start as a forex platform), 124 commodities, 28 indices and hundreds of UK and international stocks.

Two of CMC Market’s very innovative spread betting features are how they break down client sentiment and their share baskets. It’s commonplace for spread betting brokers to display client sentiment, but CMC Markets let you filter that sentiment down to profitable clients so it can become more valuable. They also provide a wide range of weighted share baskets so you can spread bets on sectors like driverless cars, big tech, cyber security and China tech, where ETFs have not yet been created.

CMC Markets spread betting platform


  • Excellent spread betting technology
  • Client sentiment indicators
  • Good for active traders


  • Limited spread betting on smaller markets
  • Pricing
  • Market Access
  • Online Platform
  • Customer Service
  • Research & Analysis

Spreadex: Best UK Spread Betting Platform For Customer Service & Small Caps

Spreadex Trading
  • Spread betting markets available: 10,000
  • Minimum deposit: £1
  • Equity overnight financing: 3% +/- SONIA
  • Pricing: Shares 0.2%, FTSE 1, GBPUSD 0.9
  • GMG rating:
  • Customer rating: 4.2/5 (234 reviews)

72% of retail investor accounts lose money when trading CFDs with this provider

Spreadex Spread Betting Review
Spreadex Trading

Name: Spreadex Spread Betting

Description: Spreadex is one of the last spread betting brokers to offer a mixture of financial and sports spread betting, for those who want to trade the FTSE during the week and the Footie on the weekend. I’ve used both services for nearly 20 years and have seen them mature along with the industry.
72% of retail investor accounts lose money when trading CFDs with this provider.


Overall, Spreadex is an excellent spread betting broker for those who want personal service and the ability to speculate on financial as well as sports markets.

  • Spread betting markets available: 10,000
  • Minimum deposit: £1
  • Account types: CFDs, spread betting
  • Equity overnight financing: 3% +/- SONIA
  • Pricing: Shares 0.2%, FTSE 1, GBPUSD 0.9

Based in St Albans, just outside of London Spreadex offers a simple but innovative spread betting platform for trading a wide range of assets. Spreadex has always focused on customer service, winning business from referrals and maintaining long-term relationships with their clients.

It’s a testament to the business that they build their own technology in-house and are reserved with marketing campaigns.

They offer access to over 10,000 markets and recently Spreadex has reduced spreads across the major assets and still offers access to smaller-cap stocks compared to some of the other providers.

The spread betting platform does have some good charting options, such as adding pro trading tools like WVAP and pro trend lines, as well as the usual obligatory technical indicators like Bollinger Bands and Moving Averages. You can see what percentage of clients are long on watchlists and you can quickly go to a specific time point on a chart.

There is also a wide range of ETFs, ETCs and Trackers to spread bet on for sector speculation, and you also have the option to trade political markets.

Spreadex spread betting platform


  • Excellent customer service
  • Smaller cap stock spread betting
  • Proprietory spread betting platform


  • Limited spread betting on options
  • Pricing
  • Market Access
  • Online Platform
  • Customer Service
  • Research & Analysis

IG: UK’s Best Overall Spread Betting Broker

  • Spread betting markets available: 17,000
  • Minimum deposit: £250
  • Equity overnight financing: 2.5% +/- SONIA
  • Pricing: Shares 0.1%, FTSE 1, GBPUSD 0.6
  • GMG rating:
  • Customer rating: 3.9/5 (674 reviews)

70% of retail investor accounts lose money when trading CFDs and spread bets with this provider.

IG won best spread betting broker in our 2023 awards. They were the pioneers of the industry and have remained at the forefront of its innovation since its inception.  IG offers a huge selection of markets to trade, with deep liquidity and competitive pricing.

Previous winners have been:

  • 2022: IG
  • 2021: CMC Markets
  • 2020: IG
  • 2019: Spreadex
  • 2018: IG
IG Spread Betting Review

Name: IG Spread Betting

Description: IG won “best spread betting broker” in our 2023 and 2022 awards as it continues to be the best spread betting platform. As well as inventing the concept of financial spread betting in 1974, IG also offers access to the most markets, with the most liquidity and are, (by market cap as of April ’22) the biggest spread betting broker valued at over £3.5bn.
70% of retail investor accounts lose money when trading CFDs and spread bets with this provider.


Overall, IG is the best spread betting broker is suitable for beginners through to professional high volume and high-frequency traders.

  • Spread betting markets available: 17,000
  • Minimum deposit: £250
  • Account types: CFDs, spread betting, DMA, investing
  • Equity overnight financing: 2.5% +/- SONIA
  • Pricing: Shares 0.1%, FTSE 1, GBPUSD 0.6

With IG you can spread bet on over 17,000 markets (an industry-leading amount) including 51 forex pairs, 38 commodities, 34 indices and over 10,000 UK and international stocks.

A few key features that make IG’s spread betting platform stand out are the ability to bet on smaller-cap shares, trade IPOs pre-market via their “grey market” and their liquidity. IG’s liquidity can actually be better than the underlying exchange, so you can place and get filled in large orders using IG’s internal liquidity when there might not be the volume on the exchange order book.

Even though IG internalises order flow they do not profit from client losses instead hedging or matching order flow and operating symmetrical tolerance levels. This means that you also benefit from positive slippage, so if you place a spread bet limit order and the market moves in your favour before it is executed you get a better fill.

When I compared pricing against other spread betting brokers IG spreads are always competitive and often market-leading, especially in the major instruments, but where IG wins business is its ability to continually innovate and add value to its spread betting platform. There are trading signals from Autochartist and PIAfirst, but IG takes it a step further by making executing these signals easier and integrating dealing tickets. IG has a good post-trade analytics feature that can show you where you are profitable or not and they create a huge amount of analysis and research around what their clients are trading based on platform analytics.

IG spread betting platform


  • Huge range of markets to spread bet on
  • Good liquidity for large spread bet positions
  • Spread betting on smaller-cap stocks


  • £250 minimum deposit
  • Pricing
  • Market Access
  • Online Platform
  • Customer Service
  • Research & Analysis

ThinkMarkets: Great For Backtesting Spread Betting Strategies

  • Spread betting markets available: 3,981
  • Minimum deposit: £10
  • Equity overnight financing: n/a
  • Pricing: n/a
  • GMG rating:
  • Customer rating: 0.0/5 (0 reviews)

66.95% of retail investor accounts lose money when trading CFDs with this provider

Methodology: Good Money Guide chose the UK’s best spread betting brokers based on:

  • 17,000+ customer votes in The Good Money Guide awards
  • Our team’s own experiences testing the spread betting trading platforms with real money
  • A deep dive into the features that make them stand out compared to alternatives
  • Exclusive Good Money Guide interviews with the spread betting brokers CEOs and senior management
  • Read more about how we rate and review here.

What Is A Spread Betting Broker?

A spread betting broker lets you trade the financial markets with trades structured as bets. This means that as you are technically gambling rather than investing, all profits are free from capital gains tax.

Financial spread betting is a tax-free type of trading in the UK because the trades are structured as bets. As there is no capital gains tax due on gambling in the UK profits can be tax-free. For more information read our guide on why financial spread betting is tax free.

When choosing a spread betting broker, you need to compare more than just costs. The main things to consider when choosing a spread betting trading platform are:

  • Market access – how many instruments can you spread bet on? (IG offers the most markets)
  • Minimum deposit – can you test the platform with a small amount when you start? (Spreadex, CMC & Pepperstone all have £1 minimum deposits)
  • Account types – do they offer DMA spread betting as well as OTC (over-the-counter)? (IG offers the most account types)
  • Inactivity fee – is there a charge if you do not use your account? (CMC, Pepperstone and Spreadex do not charge inactivity fees)
  • Founded – how well established is the spread betting platform? (IG is the oldest spread betting broker)
  • PLC – public spread bet firms that are listed on stock exchanges have to report their financial health on a more regular basis. (IG and CMC are listed on the LSE, CIty Index is owned by StoneX which is listed on the NASDAQ)

Pros & Cons Of Using A Spread Betting Broker


  • Tax free profits: As traders are strucutred as bets you don’t have to pay capital gains tax on profits.
  • Go long or short: As financial spread betting is a derivative product you can speculate on the market gonig up or down.
  • Leverage: You can be more effecient with your risk capital and get more exposure to stocks and financial markets with only a small deposit.


  • Risky: You could lose as well as make money when speculating in high risk investment products like spread betting.
  • No underlying ownership: When trading stocks as a spread bet you have no voting rights on corporate actions.
  • Leverage losses: As you are trading on margin it is possible to lose money very quickly.

Compare The UK’s Top Spread Betting Brokers

To find the best platform for you, use our comparison tables of what we think are the best spread betting brokers to compare how many markets they offer, how much it costs to trade major instruments, minimum deposits and what the overnight financing costs are for holding longer-term positions.

Spread Betting BrokerMarkets AvailableMinimum DepositGMG RatingMore InfoRisk Warning
City Index Spread Betting12,000£100
See Platform69% of retail investor accounts lose money when trading CFDs with this provider
Pepperstone Spread Betting1,200£1
See Platform75.3% of retail investor accounts lose money when trading CFDs with this provider
IG Spread Betting17,000£250
See Platform70% of retail investor accounts lose money when trading CFDs and spread bets with this provider.
Spreadex Spread Betting10,000£1
See Platform64% of retail investor accounts lose money when trading CFDs with this provider
CMC Markets Spread Betting12,000£1
See Platform69% of retail investor accounts lose money when trading CFDs with this provider
See Platform66.95% of retail investor accounts lose money when trading CFDs with this provider

Good Money Guide only features spread betting brokers and platforms that are FSC regulated:

All spread betting brokers operating in the UK must be regulated by the FCA. The FCA is the Financial Conduct Authority and is responsible for ensuring that UK spread betting brokers are properly capitalised, treat customers fairly and have sufficient compliance systems. 
You are also protected by the FSCS (Financial Services Compensation Scheme).

Best Spread Betting Broker For Beginners

The Good Money Guide team has ranked City Index as the best spread betting broker for beginners as they offer a simple trading platform with lots of analysis and news. You also get trading signals from their unique Smart Signals feature and you can use the Performance Analytics feature to see which particular markets you are trading most profitably.

This comparison table shows which spread betting platforms have tools that are helpful for new traders.

Account Types:City IndexCMC MarketsPepperstoneSpreadex Trading ReviewIG
Trading Signals✔️✔️✔️✔️
Leverage Control
Low Risk Products✔️
Investment Account✔️

Our Top-Rated Spread Betting Platform For Experienced Traders

IG is the best spread betting broker for experienced traders as their liquidity and market range are unparalleled. IG’s internal matching means that there can be better liquidity on their order book than on the underlying exchange, which is particularly good for working larger orders above the NMS (normal market size). IG also have a specialist desk for high-net-worth traders with personal dealers assigned to your account.

If you are an advanced trader with plenty of experience spread betting, this comparison table shows the features commonly used by professional traders.

Advanced Features:City IndexCMC MarketsPepperstoneSpreadex Trading ReviewIG
Voice Brokerage✔️✔️✔️✔️
Corporate Accounts✔️✔️✔️✔️✔️
Algo Trading✔️✔️
Prime Brokerage✔️✔️

Our Favourite Forex Trading Spread Betting Broker

City Index offers the most forex pairs for spread betting on foreign exchange, as well as intra-day trading signals, news, analysis and tight FX pricing.

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.

Our trading experts ranked the best spread betting brokers by how many forex pairs they offer:

  1. CMC Markets: 338
  2. City Index: 182
  3. Pepperstone: 62
  4. Spreadex: 60
  5. IG: 51

What Spread Betting Broker Is Best For Stocks & Shares?

IG currently offer the largest amount of UK, US and international shares to spread bet on. As well as a huge range of stocks to trade they also provide technical and fundamental trading signals through autochartist and PIAfirst. There is also excellent integrated news coverage and analysis, economic diaries so you can see which companies are reporting and for larger traders excellent liquidity for working orders outside the usual normal market size (NMS).

The Good Money Guide team chose these best spread betting brokers by how many shares you can trade:

BrokerUK SharesUS SharesTotal Equities
City Index:5,0002,0007,000
CMC Markets:7454,9685,713

Which Spread Betting Brokers Is Best For Commodities?

CMC Markets currency offers the most commodities for spread betting on. They offer over 100 commodities as cash best or forwards, and you can also trade a wide range of commodity ETFs on individual commodities or sections such as agriculture, energy or precious metals.

After hands-on analysis, Good Money Guide chose these as the best spread betting brokers by how many commodities you can trade:

  1. CMC Markets: 100+
  2. IG: 35
  3. Pepperstone: 32
  4. City Index: 20
  5. Spreadex: 20

Can You Spread Bet On MT4 & MT5?

Yes, Pepperstone is the best MT4 spread betting broker as they offer one of the widest ranges of markets to trade and have a pre-built package of indicators exclusively for their traders.

MT4 is one of the most popular ways to trade the financial markets, and 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. Spread betting companies that provide MT4 give clients the ability to upload and purchase custom indicators, and then run automated trading strategies based on pre-set technical perimeters. Traders can also follow “Expert Advisors” and trade based on established FX strategies without the need to execute trades manually.

Good Money Guide hand-picked these best spread betting brokers by how many markets you can trade on MT4:

  1. Pepperstone: 1,200
  2. CMC Markets: 200+
  3. IG: 91
  4. City Index: 84+

Which Broker Has The Cheapest Spread Betting Spreads?

CMC Markets often have the cheapest spreads of all the spread betting brokers. You can compare how much spread betting platforms charge for the most popular markets in this spreads comparison table:

Trading Costsig reviewpepperstone reviewSpreadex
FTSE 100111111
DAX 301.
S&P 5000.
Crude Oil0.30.283230.4
UK Stocks0.0080.0010.0010.0010.0020.30%

Tight spreads are important when choosing a spread betting broker

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 they impact how quickly you can make money.

There are other important considerations to take into account. 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 when you pick a broker that they offer consistently tight spreads, and not just during normal trading hours. Securing tight spreads when you want to trade is more important to your profits than choosing a broker that offers the cheapest spreads.

Spreads can also vary on the asset class. In some circumstances, it may be best to go with a spread betting broker that has consistently tight spreads throughout their 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. You can then use alternative accounts for other instruments.

Spread Betting Broker For The Best Market Access

IG currently offers the most markets for spread betting, around 17,000 financial instruments including UK and international stocks, commodities, forex pairs and indices.

Use our comparison table to see which spread betting broker offer the most tradable assets:

Market Access:ig reviewpepperstone reviewSpreadex
Total Markets1200017000110001200100003700
Forex Pairs84513386254138
UK Stocks350039257451921575450
US Stocks10006352496888021101575

Choose a spread betting broker with the best range of offered markets

Some spread betting companies focus on tight spreads on a few key markets. Others focus on providing a good overall value and service. When opening a new account, have in mind what asset classes and individual instruments you want to trade.

If you have AIM and small-cap shares, you will need a spread betting broker that specialises in them, like Spreadex, or IG.

You may need to consider separate accounts if you have a favourite broker for one market but want to trade on a market they don’t offer. However, remember that all brokers will offer the major index, commodities and FX pairs though.

Our Top-Rated Spread Betting Broker For The Best Leverage & Margin Rates

The FCA and ESMA regulators have put caps on how much leverage spread betting companies can offer retail traders so margin rates are standardised across spread betting platforms at:

  • Indices: 20%
  • Major Forex pairs: 3.33%
  • Commodities: 10%
  • UK & US shares: 20%

This means if you want to trade shares you have to put down 20% of the value of the trade as a deposit for the initial margin, the equivalent of leveraging your money 5 times. This was in part to protect spread betting clients from over-trading but also to protect the brokers for having to cover client losses. Since the CHF cap was removed and many clients went into negative equity (owing the broker money by losing more than their account balances) the regulators have forced spread betting companies to guarantee that retail client accounts will not go into negative equity.

If a broker is unable to close client positions, they must cover the client losses that exceed their account balance. The margin caps were put in place also to protect the regulator as if a broker cannot cover client losses and defaults, client funds are protected by the FSCS which the regulator is responsible for. So by increasing the amount of margin required for trading, there is less likely hood of larger client losses which the broker, and ultimately the regulator would have to cover.

However, if you are an experienced trader you may be able to upgrade your account to a “professional trading account” and reduce your margin rates. To do so you will need to demonstrate that you have a large investment portfolio, have worked in relevant financial services and are a regular trader.

Trading as a retail or professional spread betting client

If you are new to spread betting, you will be classified as a “retail trader”, which means you get more protection from the regulator, restricted margin rates and standard fees. However, if you are a more experienced trader and can prove it, you may be eligible to upgrade to a “professional trader”. Being a professional trader means you get lower fees and more leverage, but less protection against losses.

Margins can change, here’s why margin increases aren’t always a negative prospect for traders.

Which Platform Offers The Most Other Account Types?

IG offers the most account types in addition to spread betting. You can also trade CFDs, DMA equities and invest for long term capital growth through a general investment account or ISA. This table shows you the account types offered by spread betting brokers to see how else you can trade through them.

Account Types:City IndexCMC MarketsPepperstoneSpreadex Trading ReviewIG
Spread Betting✔️✔️✔️✔️✔️
CFD Trading✔️✔️✔️✔️✔️
Pro Accounts✔️✔️✔️✔️
Futures & Options

Top Spread Betting Broker For Most Added Value, Research & Tools

City Index has some of the best trading signals to give you some indication of where potential markets may move as well as some great tools for analysing your past traders to see where you get it right and wrong. CMC Markets is one of the most established spread betting brokers and offers a wide variety of webinars, trading tools and indicators on their online platform. IG has lots of sentiment, data and analysis tools, whilst Spreadex have a great reputation for customer service.

Added Value:City IndexCMC MarketsPepperstoneSpreadex Trading ReviewIG
Trading Ideas✔️✔️✔️✔️
Client Sentiment✔️✔️
Post Trade Analytics✔️✔️
News & Analysis✔️✔️✔️
Web Based Platform✔️✔️✔️✔️✔️

Spread betting companies cannot give advice, but they can provide research and analysis to help you find potential trading opportunities. However, one thing to look out for if you are after value (other than tight spreads) is what else you get as part of the spread betting trading platform. Some spread betting accounts provide access to third-party research and analysis services such as autochartist, PIAfirst, trading central and Tipranks.

Spread Betting Platforms With The Best Voice Brokerage

City Index, IG and CMC Markets provide dedicated support if you have a large account where as smaller spread betting brokers like Spreadex tend to provide dealer access to all clients. 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.

Being able to get help when you need it and have the ability to trade over the phone is a vital part of spread betting. Whilst over 95% of trades go through online and trading apps ensure you are connected to the market all the time, there still may be occasions when you need the help of experienced dealers.

A few occasions when you will need customer support include corporate actions on stock positions, working large orders, fixing errors, help with margin information, getting new markets added and general questions about how the products work.

All spread betting brokers we feature in our comparison tables have experienced dealers you can talk to should you need it. As spread betting is unique to the UK, spread betting companies have offices in and around London and provide direct lines to dealing staff.

What Is Spread Betting?

Spread betting is trading the financial markets as a bet rather than buying or selling the underlying instrument. Instead of buying or selling a set amount of shares, futures, options or CFDs, you bet an amount based on every point the market moves through a spread betting broker.

As spread betting is trading structured as a bet, there is no capital gains tax on spread betting profits.

What Does Spread Betting Mean?

Spread betting is the name given to a kind of trading that enables investors to speculate without having to own the assets. While, conventionally, an investor can profit only if the market increases in value, spread betting enables customers to bet on the market going up or down.

Industry experts told us...

"Financial spread betting is unique to the UK where trader’s profits are not taxed as capital gains are positions are structured as bets. For UK traders, it is a very tax-efficient way to speculate on the financial markets."

Advantages Of Spread Betting

The main reason people trade via spread betting instead of investing or CFDs is that there is no capital gains tax with spread betting, so your profits are tax-free.

Other reasons for spread betting include:

  • Spread betting offers investors the possibility of making a lot of money (but there is an equal amount of risk).
  • Profits made from spread betting are not subject to tax in the United Kingdom (at the moment)
  • Investors can gain access to worldwide financial market trading
  • Trading can be intellectually challenging and exciting
  • Only a small relative amount of money is required if you try spread betting to open your trade
  • Spread betting is available 24 hours a day (even some markets on the weekends)
  • It is possible to profit even from a falling market, by going short
  • Spread betting can help you hedge your longer term growth investments
  • It enables a more diverse investment portfolio
  • Trading can easily be done from smartphones or tablets on the move thanks to many mobile apps which are available from the top brokers

Let’s look more closely at these many advantages to find out why so many people are attracted to spread betting.

Tax free profits

Perhaps the greatest benefit of spread betting is that all profits are free from tax in the UK, with spread bettors being exempt from stamp duty and capital gains tax. The reason for this is because it is considered to be a derivatives product – investors do not buy a security, instead the bet on what its future price will be. Tax free profits are one of the main differences between spread betting and CFDs.

Why profits being tax-free make a difference?

It is possible to earn an additional 28% or 18% return on any profits. Capital gains tax stands at either 28% or 18% (depending on your tax rate) on your profit if you sell your shares. Not only this, but stamp duty (a tax of 0.5% currently) is usually applied to share purchases in the UK, but spread betting is exempt from this. For both of these reasons, spread betting is a more profitable choice than stock broking, for example, where the underlying security is purchased.

This only of course applies if you make a profit, the downside is that if you lose money spread betting (as around 80% of people do) you cannot offset your spread bet losses against you other capital gains.

Read this amusing story about why spread betting is tax-free for a more sinister look at the tax free benefits.

Leverage and margin

Tax savings are not the only benefit of spread betting. Another advantage is that spread betting is traded on margin or leveraged, and therefore only a small amount of the value of the shares you buy needs to be deposited in order to open a position.

If, for example, you spread bet using a margin or leverage of 10%, the initial deposit on a position on £,5000 worth of shares is £500. As opposed to buying the shares outright with a stockbroker, where £5000 must be paid out to buy £5000 of shares.

This means you need a lot less money up front if you want to spread bet and this opens up wider access to the markets.

So, if you spread bet with a 10% margin, who pays for the remaining 90%? The answer lies with the provider of the spread betting services who, effectively, covers the trader. The size of the margin will differ between different markets and providers, with lower margins generally being offered on more popular markets. You should note, however, that while leverage often is celebrated as a top feature of spread betting, it also magnifies the risk as it becomes possible to lose more money than you used to open your trade. It also means you can diversify your positions, to reduce the single position exposure of your trading portfolio.

Short selling

Spread betting offers the possibility of short selling, allowing you to make a profit by betting on a fall in the market’s value. You can also hedge your investment portfolio with a spread bet if you think a market of share will go down in the short term.

So, how does short-selling work as a spread bet?

Short selling involves selling the security before buying it again once the price has dropped.

Technically, your broker is lending the shares to you when you are short-selling. The shares are lent from either other client position, borrowed from a fund, or (in the case of b-booking) not hedged at all.

If the market falls, you then can buy back the position  and your broker will give back the shares to whomever they borrowed from (they pay a fee to borrow them and don’t take the risk on the position). Your profit is any difference in price between the original selling price of the shares and the price at which you bought them back.

For example, if a share currently trades with a value of £73.00 and you have reason to believe those shares will fall soon, you can short sell a thousand shares (£10 per penny) in the company for £73,000.

If you called the market right and a disappointing set of company results in the release causing the price of shares to drop to £72.50 it means you can purchase a thousand shares in the company for £72,500.

Your profit is the difference between the selling price of the share at the beginning of your trade and the price that you paid in buying them back. In this case, £500.

Keep in mind though that theoretically, the price of a share can continue increasing with no limits. This is different to buying shares outright, where market prices are limited to dropping down to zero and no further. Due to this, you need to implement guaranteed stops or stop losses, on short positions because your losses are potentially unlimited.

Going long

If you think that a share price quoted at £52 is likely to go up and want to place a spread bet on it, you would be “going long”.

There will be two prices quoted – 5202 is the price to “sell” and 5198 is the price to “buy”.

You make the choice to go long at 5202 for £10 a point (1 point = 1p). That means for each point that the market goes up, you gain £10. You are proved to be correct in your prediction. In this example the price goes up to 5306 and in its sell price to 5302. You want to take your profits and therefore you choose to sell your shares at 5302.


As your bet was £10 for each point, you made a profit of £10×100=£1000.

Market range

Spread betting offers trading on literally thousands of different markets. Depending on which provider you choose and the various markets on offer from them, you may be able to speculate on:

  • Commodities
  • Options
  • Indices
  • Shares
  • Interest rates
  • Binaries
  • Foreign Exchange

Trading 24/7

You can spread bet 24/7 if you choose, even on weekends. This means you can speculate on events that take place out of the market’s standard trading times, when other investors miss out. Oil is one market which offers a clear example of this. Saudi Arabia has considerable influence over the oil market, and any decision which is made out of standard trading hours would result in a sudden fluctuation overnight. Spread betting brokers also offer forex and index trading over weekends.

The spreads are wider because it is harder for brokers to hedge their position, but they still provide a good indication of where a market may open when normal trading hours resume.

Risks Of Spread Betting

With spread betting, it is possible to lose money quickly, and especially so if you have a professional trading account for your losses to exceed your deposit.


Spread betting brokers are obliged by the FCA (who regulate spread betting) to display on their website what percentage of retail trading lose money. They must also state that professional traders could potentially lose more money when they spread bet than they put down as a deposit when they opened the trade. This is one primary difference between stockbroking and spread betting.

Leveraged losses

Take stockbroking, for example. If you purchased shares worth £1000 and then the market crashed so the shares were worthless, all of the money (£1000) would be lost but no more than that. However, in the case of spread betting, if you put down £1000 but the market moved against you, you could not only lose £1000 but if you didn’t have the right risk management in place, you could potentially lose thousands more.

No underlying ownership

As you are placing a bet on a share price rather than owning it you do not get to vote in company AGMs or have any rights on corporate actions. You simply have a bet with your broker. Spread betting platforms will not normally allow spread traders to vote in company issues, but in some circumstances, you position may be reflected in corporate actions.

Not investing

Spread betting is trading, not investing.  As it is riskier than investing in funds, bonds and shares, it is sensible that spread betting is used only as a part of your overall investment strategy so you can lower your trading risks as a whole or speculate with a small percentage of your risk capital.

How To Start Spread Betting

As spread betting allows you to bet on whether a price is going to fall or rise you will be given a quote from your spread betting broker. This comprises a “sell” price and a “buy” price.

As an example, if your provider offers a share at a price of 205/206, the left value is its sell price and the right value is its buy price. Should you believe the market will rise, you “go long” or bet on “buy”. On the other hand, if you believe the market is going to fall, you “go short”, or place a bet on “sell”.

After deciding which way you are going to bet, you then need to choose how much you are going to commit to the trade per point of movement in the market.

A pip, or point, is the measurement of the price movement, with its value depending on the asset type. In the case of equities, for example, one point tends to equate to 1p, however with indices, usually 1 point equals one point in the index value.

After placing the bet, the further the market goes in the direction you selected, the more money you will make from the trade. Inversely, the more the market moves against you the more you lose.

However, if the market moves in your favour, you have to overcome the spread – a part of the cost required to open a trade.

Diversification – a basic premise for trading

The best traders in the world only get it right about half the time, most traders admit to being right about 55% of the time.  But what makes the right trades right is that there are enough of them to run the wins and cut the losses.  Traders need to look at as many trends and momentum charts as possible.  A good diversified set of open positions against asset classes such as commodities, FX, indices and stocks should provide a bit of protection against economic indicators and external factors influencing price.

Once the positions (say ten or so) are open you should be able to tell in your open profit and loss section what traders are winning and what trades are loosing.  When you call a trend correct run it, when you have called it wrong cut it.  The skill is in closing positions, not opening them.  A profitable position can go on to generate far more profits than ten small losses.

Risk management – using stops and limits

As above one of the greatest demises of any trader is not cutting a loss.  Traders live in hope that they will eventually be proved right and it is essential that realism is exercised.  Traders get it wrong and using stops to automatically cut a bad position takes the emotion out of the game.  Set yourself an amount you are prepared to lose on each trade and stick to it.

What Can You Spread Bet On?

Depending on which spread betting company you choose, it’s possible to speculate on thousands of different markets such as commodities, forex, shares, bonds, interest rates and indices. Let’s explore what’s involved in trading these various markets.

Index spread betting

When people refer to “the markets”, usually it is an index they are referring to. Indices measure the changes observed in a particular selection of stocks which represent a specific market (or part of it). If you trade indices, you can speculate on the overall market’s performance and due to this, usually indices reflect the sentiment of investors about a certain region, sector or economy’s state.

Compare the best brokers for trading indices here

If traders trade indices, they can develop a more diverse portfolio, speculating on either the contraction or growth of a number of industries worldwide. Index trading can also be used for taking a broad view of several companies and can reduce the risks associated with trading separate individual shares.

Some of the most popular indices for trading include:

  • The New York Stock Exchange
  • The S&P 500 (made up of the USA’s 500 biggest companies)
  • The Dow Jones Industrial Average (made up of the USA’s 30 most influenced and largest companies)
  • The NASDAQ Composite Index (an exchange focused on technology)
  • Nikkei 225
  • FTSE 100

Forex spread betting

The Forex global market is the biggest financial market in the world, with up to $4 trillion of trades being placed each day. Forex spread betting refers to trading currency pairs to speculate which will go up in value when compared to the other. Open 24 hours, five days per week, the global Forex Market is very liquid and offers potential to achieve huge profits.

How does forex spread betting work?

  • Currencies are always traded in pairs. The base currency is the first of the pair and the second is the quote or counter currency
  • Every Forex quote has two parts – the bid and the ask price. The term “bid” refers to the price which the broker will buy the base currency for in return for the chosen counter currency. The term “ask” refers to the price which the broker will sell the chosen base currency for in return for the chosen counter currency
  • The term “spread” refers to the difference between the ask and the bid and this determines the position’s cost to open
  • A major currency pair will be usually quoted to 4 decimal places. A pip or point is the final digit of this quote, so, if you were looking for a quote on EUR/USD and the bid price was 1.0661 and the ask price was 1.0664, there would be a spread of 3 pips. This cost must be redeemed from the traders’ profits and therefore the market must move favourably in order to just break even

When you trade shares, the price is fixed, however this is not the case when trading currency pairs. Currency quotes will differ between the various brokers and banks. The reason for this is that Forex is an OTC (over the counter) market, with no physical point of central exchange. Therefore, it is not as regulated as the stock market.  Since there can be variations in bid-ask spreads between providers, you need to take the time to compare spread betting brokers before you commit to the one which offers you the optimal spreads to suit your trades.

Spread betting on forex enables investors to trade 24 hours a day, 5 days per week as there is no centralized physical exchange to have set closing hours. That means that when you are told the US$ closed at a certain rate, that rate refers to the time at which the New York stock market closed, but spread bettors and traders are still able to trade in Forex after the stock markets close, which is very difficult to trading shares.

You need to be aware of the various terms which are used in this form of trading.

For example, if you trade a currency pair, one currency is long and the other is short. This means if you’re selling 100,000 units (standard lot) of EUR/USD, you are exchanging Euros (EUR) for Dollars (USD). The dollars are “long” and the Euros are “short” in this scenario.

It often helps when you think of some exchanges that you carry out every day. Imagine you have purchased 4 apples for £1 in a supermarket, you are then short £1, but long 4 apples. This principle also works when applied to Forex although there is no physical exchange.

Commodities spread betting

A commodity is a tradable raw material or a primary agricultural product. The commodities which are most commonly traded include precious metals like gold and silver, agricultural products like beef, sugar, coffee, barley, gas and oil.

There are several ways of classifying commodities. A soft commodity is one which is bred or grown (like oats or cattle) while a hard commodity is one which is extracted such as aluminium or copper. Sometimes, commodities are classified in categories like:

  • Energy – gasoline, heating oil, natural gas and oil
  • Metals – aluminium, platinum, copper, gold and silver
  • Agriculture – sugar, wheat, rice, cocoa and coffee
  • Livestock and Meat – feeder and live cattle

Usually, commodity trades are carried out via futures contracts on an exchange which standardises the minimum quality and quantity of the communities being traded. As a future is a contract to sell or buy the asset, should the trader fail to close their position before it expires, a large delivery of a commodity that the trader neither wants or needs could end up being the result.

When you’re a spread bettor, however, you won’t need to worry about this eventuality. You are just speculating on the asset’s movement, not actually purchasing the future. Your provider, however, will always ensure that the situation never occurs by closing the trade before it expires.

Typically, the commodity market follows supply & demand, with lower supply leading to a higher price. The price of commodities can be affected by numerous elements including weather patterns, advances in technology, wars, health epidemics and developments in the global economy.

Shares spread betting

A share is a piece of a company ownership which may be purchased and sold via financial stock markets such as the New York or London stock exchanges. The value of shares is determined by supply and demand, and this can be primarily affected by the performance (or the perceived performance) of the company by its investors. If the company, for example, reports to its investors that they have had an especially successful quarter, their share prices usually rise. But if the same company issues profit warnings, or is implicated as being involved in some kind of scandal, it’s likely their share price will fall.

As every share belongs to one specific company instead of being focused on the economic status of a country or whole industry (as is the case if you choose to spread bet on Forex or indices), when you trade shares it’s possible to research in a more focused way about the company which you believe will increase its value.

Spread betting gives traders the ability to speculate on many thousands of different shares across a variety of shares markets around the globe.

Bond spread betting

A bond is an interest or debt bearing instrument which can be traded and represent one way for governments and companies to raise sufficient money so that they are able to pay for their investments.

Should any future change to long term rate of interest be something that interests you, it could be worth trying to speculate on bonds. A lot of investors choose to include bonds in their investment portfolio since they have a reputation for stability and safety when compared to stock market trades. Some investors also choose to trade in bonds as a way of hedging against any pre-existing government bond holdings.

The majority of spread betting brokers will offer a good selection of government bonds from around the globe for investors to try speculating on. Usually, these include all of the main categories of international bonds like 10 Year Treasury Notes, U.S. Treasury Bonds and UK Gilts.

Spread Betting Costs & Fees

Here, we look at the main costs which you will probably encounter once you start trading with a spread betting firm.

Size of the Spread

Traders have to pay the spread cost on every spread bet. If they are to break even, the spread needs to be overcome by market movements in your chosen direction. The spread will be shown in the sell and buy price when you place the trade.

Volatile markets will usually cause the spread to increase, since the underlying security’s price can change rapidly, going up or down in a short period of time. Similarly, if you trade in spread bet futures contracts (quarterly or annual), the further ahead your trade contract is due to expire, the wider its spread can be since the asset’s price has a larger scope to move over a longer time period and providers must necessarily protect themselves from large movements in the market.

Most companies which offer spread betting use their prices to persuade new clients to register for their services, using the most popular markets when advertising their services and on their sites. However, in cases where spreads are smaller, it is possible the overnight charge or margin requirement could be higher. They may also be a minimum limit placed on the capital spend allowed per trade. Check out these numbers before opening an account.


A margin refers to how much capital is required for opening a position. It is defined by a margin rate. The margin rate will depend on which security you choose for spread betting – usually, if the bet is risky, the margin will be higher in order to cover the extra risk.

Overnight financing

This is probably the largest cost you are likely to encounter. There are two primary ways of spread betting:

  • Entering into a rolling daily contract
  • Opening a futures contract

A rolling daily contract may be indefinitely kept open. While they do expire eventually, it will only be after several years. A futures contract, on the other hand, has a set expiry date, although you can close it out before it expires. If you trade using a rolling daily contract, a charge is applied for every night that the trade remains open and this is the “rolling daily rate”. It usually appears as a debit or credit on your account with your provider debiting the amount of you have entered a “buy” or crediting you if you made a “sell” trade.

This cost has been put in place since you are, for all intents and purposes, borrowing your provider’s money since you are trading on leverage.

When it comes to futures trading, there is no rolling daily rate applied, however there is usually a wider spread instead because of the extra costs which the provider has to cover to keep the position open.

When we look at the rolling daily rate, it is composed of the provider’s standard charge as well as a one-month interbank funding rate such as LIBOR.

Inactive Fees

When a trader doesn’t place a trade or doesn’t maintain a cash position open on their account for more than 12 months, an inactivity is sometimes applied by the broker every month. The amount will differ between brokers, so you should check this out before you open an account.

Ask Price

Sometimes called “buy price” this refers to the price which the buyer pays for their security. It is quoted within a bid/ask quote.


The term “bear market” means one which is seeing a fall in its value. Traders who think that the price of stock is about to decline can be described with the term “bear” or is described as having a “bearish outlook”. The term “bull market” is the opposite of this.

Bid Price

This refers to the price that the traders is able to sell the security it. Sometimes called a “sell price”.

Bid-Ask Spread

Difference between bid and ask prices.


Apart from taxation, world governments also borrow money in an international credit market by issuing bonds which are debt-bearing instruments which are able to be traded.


This term described a rising market which is characterized by increases in share prices by more than 20%. Bulls are also traders who think stock market prices are rises. The opposite of “bear.”

Capital Gains Tax

This is a 28% or 18% tax which depends on whether the trader pays income tax at the higher or basic rate. It is paid on any profits on selling shares (which are not in a PEP, ISA or NISA). When spread betting, it’s possible to earn an extra 28% or 18% return on trading profits.


A commodity is a tradable raw material or primary agricultural product. Some of the most popular commodities for trading including precious metals, sugar, coffee, agricultural products like beef, oil and gas.

Daily Rolling Rate

This charge is applied for every day that a trade remains open. This fee generally includes the provider’s standard rate as well as a 1-month Interbank funding rate (such as LIBOR).

Exotic Currency Pairs

An exotic currency pair is made up of a major currency which is paired with another currency from a smaller or emerging economy. Since exotic currencies are sold and purchased in large volumes, the spreads are generally very narrow. Since these emerging and smaller economies have a financial, economic and political environment which changes rapidly, their currencies often make larger and speedier moves allowing the potential for greater profits.

Going Long

Going Long refers to placing a “buy” bet which you would do if you think the market will rise.

Going Short

Going Short refers to the occasions when a trader places a “sell” bet as they think the market is going to fall.


Companies and investors use hedging as a way of protecting themselves while reducing their exposure to risks.


When people use the term “markets”, usually they are talking about indices. An index measures the change in several stocks which represent a specific market (or part of one).


During spread betting, traders benefit from using leverage which allows only a small amount of money to be put down as a deposit on the security’s price in order to open trades. This means profits may be hugely amplified.


Liquid markets are when there is a lot of demand from sellers and buyers, resulting in low volatility and narrow spreads. Trades in liquid markets take place easily and quickly and at low cost due to the large amount of ask and bid offers. Low volatility also means changes in supply & demand will have only a minor impact on the prices.


A margin refers to the amount of money required to open positions, defined by a margin rate. This different depending on the security chosen for spread betting. Margin trading enables investors to speculate with just a tiny amount of the amount of money which would normally be required.


This describes a price change in a security. It is the smallest price change possible in the security that is being speculated. E.g. should the FTSE market experience price movements from 6331.95 up to 6331.97, the price change is 2 points.


Usually all major currency pairings are quoted to 4 decimal places, with the final digit being named a pip or point. E.g. if the EUR/USD pair had a quote of 1.0661 as its bid price and 1.0664 as its ask price, the spread is 3 pips.


When the bet approaches expiry, it will be closed then another bet in the same direction and size will be opened to cover the following period to prolong the exposure of the bettor to that security.


Securities are assets which are tradable on the markets. Commonly, the term means any kind of financial trading instrument.


A trader can short or “sell” a market when they think it is going to fall. It is also possible to “sell” if you wish to close out on a pre-existing “buy” bet.


A share is a fraction of the value of a company which is owned by an individual. Shares are traded via stock markets like the New York or London stock exchanges.


The spread is the amount of difference between the sell and buy price of any security. Sometimes called the bid/ask spread, it can be influenced by a number of elements like supply & demand, or the total trading activity or liquidity of that security.

Stock Exchange

The term “stock exchange” is used to refer to an exchange or market where securities like bonds and shares can be purchased and sold. Prices in the stock market are dependent on supply & demand.

Stop Loss

A stop loss orders a security to be sold at a specified price to limit any loss.

Stamp Duty

This tax (currently standing at 0.5% in the UK) is applied to all share purchases in the UK. Spread betting is exempt from stamp duty, therefore a short or medium term spread bet could well be more affordable than purchasing the securities themselves.


Volatility refers to how much variation there is in a trading price in the market over time.

Spread Betting Brokers FAQ:

Commonly, only around 20% of retail clients make money with spread betting brokers. If you are a complete beginner or new to trading altogether, then the sensible thing to do is to read around the subject, define a strategy and practice spread betting using a free demo account before you commit any real money.

See our guide on how to make money spread betting.

Stuart Wheeler the founder of IG, is generally credited with inventing and popularising the concept of betting on financial markets in 1974.


The most popular markets for spread betting are in order:

  1. Indices
  2. Stocks & shares
  3. Forex
  4. Commodities

You can read more about why these markets are so popular in our guide to the best markets for financial trading.

Yes if you have a professional spread betting account, but not if you are classified as a retail trader. The FCA has banned trading on cryptocurrencies. However, you can buy and sell cryptocurrencies through crypto exchanges.

Yes, spread betting brokers are regulated by the FCA and client funds protected up to a certain amount by the FSCS.

However, over that amount your funds are not protected and as spread betting is an OTC product your risk is with the broker rather than the exchange. The best way to ensure your funds are protected is to always use a well capitalised broker.

An easy way to keep an eye on a company’s financials is to go with brokers that have traded themselves on the London Stock Exchange. Being a public company means that you have to submit financial reports regularly. The share price and market cap are also good indicators of whether or not a company is heading for trouble.

IG, CMC Markets and CIty Index are publicly listed spread betting brokers.

CFDs are for professional traders who use them for direct market access and anonymity (to an extent). Outside the UK, CFDs are used by private clients as there are no tax benefits. Read what the difference is between spread betting and CFDs for more information.

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 betters are the only traders that benefit from the tax breaks.

In short, the answer is a simple one, which involves spread betting brokers not having enough experience. Amateur or beginner traders are often guilty of over trading, over leveraging and not cutting their losses or running their profits. However, 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.

Further reading:

Yes, plus you do not have to pay tax on forex trading if you are spread betting, however you do if you are trading spot or CFDs.

As an alternative to trading CFDs on forex, individuals and UK taxpayers can spread bets on foreign exchange.

Spread betting, as the name suggests, are wagers on the performance of an instrument or market rather than a trade, and though the methodology and pricing of these two types of transactions can look very similar, the tax treatment of any profits made in them is very different.

Profits made from trading are subject to UK capital gains tax, whilst under current legislation, profits generated through spread betting are tax-free. By the same token, losses made in trading can be offset against capital gains made elsewhere, whilst spread betting losses cannot.

For more information on forex trading tax, read our Q&A: Do you have to pay tax on forex trading?

The tax treatment is the principal difference between the two forms of speculation, however, some spread bets may be priced in a similar way to futures contracts; that is with the cost of carry or financing included in the quote at the outset, rather than being charged daily, as is the case in forex trade. Spread bets are also likely to have a fixed expiry, whether daily, weekly or quarterly. While FX trades, which are effectively CFD trades, have no fixed expiry unless you are trading a currency future or option, rather than the rolling spot contract.

The mechanics of spread betting on FX are very similar to those of trading FX. Of course, you will need to open a spread betting account to spread bet rather than a trading account. You will also want to familiarise yourself with the bets that spread betting providers offer and the contract lifetimes, and the way that they are priced that could be very different for say a rolling daily bet, a weekly bet or indeed a monthly or quarterly bet.

One obvious thing to try to do is to match the contract you are going to be betting on with your time horizons, and style of speculation daily bets won’t be much use to you if you have a two- or three-week-time horizon. Equally, a quarterly contract may not be your best choice if you are an intraday bettor.

This article contains affiliate links which may earn us some form of income if you go on to open an account. However, if you would rather visit the spread betting brokers via a non-affiliate link, you can view their financial spread betting pages directly here:

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