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Best Spread Betting Platforms & Brokers UK 2024

Tobi Opeyemi Amure
Reviewed by:
Best spread betting platforms UK

In a nutshell, the best spread betting platforms are Spreadex, offering a wide range of markets and personalised customer service; Trade Nation, known for its transparent pricing and user-friendly platform; and IG, which provides extensive market access and advanced trading tools.

Selecting the right spread betting broker is crucial in the fast-paced trading world.

I’ve tested, scored, and ranked the best spread betting platforms in the UK.

Whether you’re looking for top-notch security, user-friendliness, or low fees, I’ve got you covered.

Overall best
Best for low-cost spreads
4.7
4.6
Description:

Award-winning trading platform suitable for beginner and experienced traders.

Description:

Access some of the lowest-cost fixed-spreads around, on the markets you most want to trade.

Disclaimer:
64% of retail investors lose money when trading spread bets and CFDs with this provider.
Disclaimer:
75% of retail investor accounts lose money when trading CFDs with this provider.
Overall best
4.7
Description:

Award-winning trading platform suitable for beginner and experienced traders.

Disclaimer:
64% of retail investors lose money when trading spread bets and CFDs with this provider.
Best for low-cost spreads
4.6
Description:

Access some of the lowest-cost fixed-spreads around, on the markets you most want to trade.

Disclaimer:
75% of retail investor accounts lose money when trading CFDs with this provider.

10 Best Spread Betting Platforms & Brokers UK Ranked

Here is a quick list of the top spread betting platforms to use in the UK based on my hands-on analysis:

  1. Spreadex – Overall best spread betting platform UK
  2. Trade Nation – Best for user-friendly trading experience
  3. IG – Best spread betting broker UK for beginners
  4. AvaTrade – Best for spread betting commodity spot markets
  5. Pepperstone – Best spread betting platform for utilising MT4/MT5
  6. City Index – Best UK spread betting platform for trading signals & post-trade analysis
  7. Capital.com – Easy-to-use spread betting platform
  8. CMC Markets – Best for advanced forex & CFD trading
  9. FXCM – Best for advanced technical research
  10. Admirals – Best spread betting broker for MetaTrader users

Best Spread Betting Brokers Compared for UK Traders

Here I’ve compared the spread betting platforms based on four key factors you must consider and compare.

What are the best spread betting brokers in the UK?

RankPlatformMinimum depositSpread fees (shares)Markets availableTypes of assets
1Spreadex£0Varies3,500+Shares, forex, ETFs
indices, commodities
futures, sporting events
2Trade Nation£00.6%1,200+Shares, forex
indices, commodities
bonds
3IG£2500.10%20,000+Shares, forex
indices, commodities
4AvaTrade£1000.13%10,000+Shares, ETFs, forex
indices, commodities,
bonds, options
5Pepperstone£10.10%1,600+Shares, forex
indices, commodities
6City Index£1000.08%12,000+Shares, forex
indices, commodities
7Capital.com£200.13%2,800+Shares, forex, ETFs
indices, commodities
8CMC Markets£00.6%12,000+Shares, share baskets
ETFs, forex
indices, commodities,
bonds
9FXCM£500.4%440+Shares, indices
forex, commodities
10Admirals£1000.4%8,000+Shares, forex
indices, commodities
ETFs

Best Spread Betting Platform UK Reviews

In 2023, around 2 in 5 Brits (42%) invest and trade, up from 36% in 20211.

Choosing the best spread betting platform is crucial for newcomers in the market.

Having worked in the retail investment sector in London over the last four years, I had the opportunity to experience the rise first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest spread betting brokers on the market.

Using my experience in this field, I’ve compiled a list of the best spread betting brokers in the UK based on four key criteria:

  1. Minimum deposit
  2. Spread fees (shares)
  3. Markets available
  4. Types of assets

Factors such as usability, trading platforms available, research tools, educational materials, and additional features were also considered.

All the spread betting apps and platforms I’ve reviewed below are regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA) or similar.

You can read about how we test platforms here.

This article was reviewed by Tobi Opeyemi Amure, a trading expert and writer at InvestopediaInvesting.com, and Trading.biz.

1. Spreadex – Overall best spread betting platform UK

Spreadex - Overall best spread betting platform UK.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

The overall winner on my list of the best spread betting brokers is Spreadex.

Spreadex, established in 1999, stands out as a versatile spread betting platform in the UK, uniquely encompassing both financial markets and sports betting.

This platform offers a unique opportunity to engage in spread betting across various sports like football and cricket, along with financial instruments such as shares, indices, currencies, and commodities.

The platform is notable for its competitive and transparent fee structure. A key advantage is the absence of a minimum deposit requirement, making Spreadex accessible to a wide range of investors.

Spreadex is acclaimed for its excellent customer service, recognised in the 2022 Investment Trends survey for its superior telephone and email support.

Its award-winning web-based trading platform is designed to cater to the needs of professional traders, offering over 10,000 markets and products. While it lacks MetaTrader support, the platform compensates with its user-friendliness and extensive market access.

Our vision is to serve the UK community (and beyond) who take an interest in the financial markets and want to speculate a portion of their portfolio themselves. We want to provide easy and simple access to the financial markets for clients and react to new markets and product innovations.

Tom Salmon, Managing Director at Spreadex. From our recent interview.

Spreadex is an ideal choice for UK-based spread bettors looking for a comprehensive and diverse trading platform.

With its strong focus on customer service, wide market range, and competitive fees, Spreadex caters well to both sports and financial market enthusiasts, although it could benefit from more robust educational tools and a demo account for beginners.

Read my full Spreadex review.

Key rating criteria:

Minimum depositSpread fees (shares)Markets availableTypes of assets
£0Varies3,500+Shares, forex, ETFs
indices, commodities
futures, sporting events

Pros:

  • Covers sports and financial spread betting
  • No minimum deposit required
  • Competitive, transparent fee structure
  • Award-winning customer service

Cons:

  • No demo account is available
  • Limited educational resources
  • Lacks MetaTrader support

64% of retail investors lose money when trading spread bets and CFDs with this provider.

2. Trade Nation – Best for user-friendly trading experience

Trade Nation - Best for User-Friendly Trading Experience

Trade Nation, a notable spread betting broker in the UK, has garnered attention for its comprehensive offerings and user-friendly platforms.

Established in 2014, it is regulated by several top-tier authorities, including the UK’s Financial Conduct Authority (FCA) and the Australian Securities & Investment Commission (ASIC), ensuring a high level of trust and safety for its users. 

A standout feature of Trade Nation is its no-minimum deposit policy, making it accessible for beginners.

The broker offers a broad range of over 600 tradeable symbols, including 33 spot forex pairs, numerous UK and US shares, and popular commodities, metals, bonds, and indices.

Furthermore, cryptocurrency trading is available through its Bahamas entity, expanding the options for traders.

Trade Nation’s web and mobile platforms are commendable for their ease of use, gaining high ratings for user-friendliness.

Its mobile app integrates the Smart News feature, which curates relevant Tweets and news headlines, enhancing the trading experience.

Charting is powered by ChartIQ, offering robust technical analysis tools for both web and mobile users.

The broker is known for its competitive fixed-spread pricing, which is a significant advantage, especially for forex and CFD trading.

For instance, it lists a fixed spread of 0.6 pips for the EUR/USD pair, which is competitive in the market. 

On the education and research front, Trade Nation provides quality tools and resources, although there is room for improvement in terms of variety and depth.

The broker’s YouTube channel and Smart News module are useful for market analysis and insights, but a more comprehensive approach to research and education could enhance its offerings.

Customer support at Trade Nation is rated highly, with prompt and relevant responses to inquiries. However, the absence of live chat and 24/7 support might be a downside for some users. 

In conclusion, Trade Nation is a compelling choice for UK traders, particularly for those interested in spread betting, forex, and CFDs.

Its regulatory standing, user-friendly platforms, and competitive pricing make it a strong contender in the market, although it could further improve by expanding its educational and research resources.

Minimum depositSpread fees (shares)Markets availableTypes of assets
£00.6%1,200+Shares, forex
indices, commodities
bonds

Pros:

  • Regulated by top-tier authorities
  • User-friendly web and mobile platforms
  • Competitive fixed-spread pricing

Cons:

  • Limited educational resources
  • No live chat support
  • Limited research tools

75% of retail investor accounts lose money when trading CFDs with this provider.

3. IG – Best spread betting broker UK for beginners

IG - Best spread betting broker UK for beginners.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

IG, founded in 1974, is a top contender in the UK spread betting sector. It offers a wide range of assets, including stocks, bonds, index funds, currency pairs, and CFDs.

The platform boasts access to nearly 20,000 markets (largely through CFDs and spread bets), known for its commodity, currency, share, and index options. Traders can bet in both directions and use leverage, with a maximum of 1:30 for retail and up to 1:222 for professional clients on select assets.

IG ensures trading safety with Negative Balance Protection, preventing losses that exceed an account’s funds. The platform operates with zero commission, embedding costs in competitive spreads.

Forex spreads start at 0.6 points, while stocks and indices are as low as 0.1 points. IG’s platform, compatible with web browsers and mobile devices, requires an initial funding of £250.

Regulated by the FCA, IG’s platform offers technical tools and educational resources, including webinars and live seminars. The account setup is fast, and a demo account is available for risk-free practice.

In summary, IG provides a secure and comprehensive spread betting platform in the UK, suitable for both beginners and experienced traders.

Read my full IG review.

Key rating criteria:

Minimum depositSpread fees (shares)Markets availableTypes of assets
£2500.10%20,000+Shares, forex
indices, commodities

Pros:

  • Negative balance protection & leverage
  • Zero commission and fully regulated
  • Wide selection of currency pairs, close to 100

Cons:

  • Requires a minimum deposit of £250

4. AvaTrade – Best for spread betting commodity spot markets

AvaTrade - Best for spread betting commodity spot markets

AvaTrade, established in 2006, has become a key player in the UK’s spread betting market. It offers a wide range of assets like currencies, stocks, and indices. The platform is known for competitive spreads and no commission on trades.

With over 200 financial instruments, AvaTrade gives users access to popular platforms such as MetaTrader 4 and 5, and its own AvaTradeGo app.

AvaTrade features AvaSocial, which allows for social trading within a global community. Beginners are supported with a vast library of educational content and a demo account for practice.

Opening an account with AvaTrade is easy, requiring only a £100 minimum deposit. The platform variety, including AvaOptions and MetaTrader4, provides a rich trading experience.

AvaTrade’s asset range is extensive, offering over 60 currency pairs and various commodities, shares, forex, and ETFs. Active traders benefit most from the fee structure, as a £50 inactivity fee applies after three months of non-use.

AvaTrade excels with its comprehensive educational resources and diverse trading tools, establishing itself as a premier choice for novice and experienced UK-spread bettors alike.

Read my full AvaTrade review.

Key rating criteria:

Minimum depositSpread fees (shares)Markets availableTypes of assets
£1000.13%10,000Shares, ETFs, forex
indices, commodities,
bonds, options

Pros:

  • Commission-free spread betting
  • Extensive analytical tools
  • Unique support for bond markets among spread betting platforms

Cons:

  • Inactivity fee after 3 months

5. Pepperstone – Best spread betting platform for utilising MT4/MT5

Pepperstone - Best spread betting platform for utilising MT4/MT5.

Pepperstone, originating from Australia, has become a notable name in the UK spread betting market. It serves both new and expert traders, offering a wide asset range across platforms like TradingView, Metatrader 4, Metatrader 5, and cTrader.

The platform allows for automated trading, minimising the need for continuous manual trades. It also boasts a wide array of educational materials for all levels of trading expertise.

Professional traders have access to an account that provides high leverage and advanced tools, though it lacks negative balance protection.

New traders will find Pepperstone welcoming, with no minimum deposit and no inactivity fees, making it easy to start. The platform offers over 1,600 markets, a substantial variety for many traders.

Pepperstone’s pricing is competitive. Basic accounts have zero commission on spread betting, while ‘raw’ accounts offer most markets commission-free, with a small fee on large trades.

Under FCA regulation, Pepperstone keeps leverage at a 30:1 cap for retail traders, ensuring compliance.

It suits traders who are comfortable with complex strategies and platform use. With third-party integrations like cTrader and MT4/MT5, the platform provides advanced trading tools and a broad range of assets, including forex, stocks, and commodities.

Pepperstone combines a broad asset selection with an efficient trading experience, positioning itself as a strong option for spread betting in the UK.

Read my full Pepperstone review.

Key rating criteria:

Minimum depositSpread fees (shares)Markets availableTypes of assets
£10.10%1,600+Shares, forex
indices, commodities

Pros:

  • Extensive range of assets for spread betting
  • Top-notch educational resources available

Cons:

  • Pricing is relatively high when compared to rival platforms

6. City Index – Best UK spread betting platform for trading signals & post-trade analysis

City Index - Best UK spread betting platform for trading signals & post-trade analysis.

City Index, established in 1983, has become a go-to spread betting broker in the UK, especially for beginners. It offers over 12,000 financial instruments and is regulated by the Financial Conduct Authority, ensuring a safe trading experience.

The broker is noted for its extensive educational and research resources, which include technical indicators, charting tools, and real-time news from Reuters. These tools help new traders to analyse the markets and make informed decisions.

City Index boasts tight spreads, starting at 0.5 pips, and does not charge commissions on spread bets, as costs are included in the spreads. Traders should note the overnight fees for open trades and a 12-month inactivity fee, though it’s more forgiving than some, activating after 24 months.

The platform requires an initial deposit of £100 but provides a fast, user-friendly trading experience on various devices. The wide range of research tools and educational materials, including a demo account, facilitates a learning-friendly environment for new traders.

City Index stands out as a beginner-friendly spread betting platform in the UK, offering solid educational support and a broad selection of trading options.

Read my full City Index review.

Key rating criteria:

Minimum depositSpread fees (shares)Markets availableTypes of assets
£1000.08%12,000+Shares, forex
indices, commodities

Pros:

  • Established UK brokerage since 1983
  • Access to 120,00+ spread betting markets
  • In-depth charting tools with 80+ indicators

Cons:

  • High withdrawal requirement

7. Capital.com – Easy-to-use spread betting platform

Capital.com - Easy-to-use spread betting platform

Capital.com is a leading spread betting platform in the UK, offering extensive market access across various asset classes.

It’s a prime choice for those seeking tax-free gains from over 2,400 global stock markets, including the London Stock Exchange and AIM, as well as major markets in Europe, the US, Canada, and Australia.

Forex traders have a wide selection of currency pairs at their disposal, including major, minor, and exotic pairs. The platform also provides commodities like gold, oil, and natural gas.

Notable for its 0% commission policy, Capital.com charges only the spread, enhancing its appeal for cost-conscious traders. The platform supports both buy and sell positions, enabling traders to profit from market moves in either direction.

Capital.com allows the use of leverage on spread bets, which can increase potential returns, but traders should be aware of the risks involved. The UK’s regulations limit leverage to 1:30 for major forex pairs, with tighter restrictions on other assets.

Capital.com is a comprehensive and user-friendly spread betting platform in the UK, suitable for both new and experienced traders, offering a wide range of markets and a clear fee structure.

Read my full Capital.com review.

Key rating criteria:

Minimum depositSpread fees (shares)Markets availableTypes of assets
£200.13%2,800+Shares, forex, ETFs
indices, commodities

Pros:

  • User-friendly stock trading platform
  • Enhanced trading capabilities
  • Commission-free and compliant with regulations
  • Access to a learning portal for education

Cons:

  • Considered too basic by some experts
  • Involves indirect ownership of stocks

8. CMC Markets – Best for advanced forex & CFD trading

CMC Markets - Best for Advanced Forex and CFD Trading

CMC Markets, a leader in spread betting and CFD trading, stands out in the UK for its extensive experience and robust platform.

Established in 1989 and listed on the London Stock Exchange, this broker is well-regarded for its financial stability and strong regulatory standing, authorised by several Tier-1 jurisdictions including the UK’s FCA.

Key strengths of CMC Markets include its competitive pricing, especially in forex trading, where it consistently offers lower costs compared to industry standards.

Their unique pricing structure, like the FX Active program, provides even more value with options like commission-based pricing and discounts for active traders, making it a prime choice for both casual and serious investors.

The Next Generation platform, CMC Markets’ proprietary trading interface, is a standout feature. It offers over 12,000 tradeable instruments, making it one of the most versatile platforms in the market.

The platform’s user-friendliness, coupled with advanced tools and comprehensive market research, enhances the trading experience significantly.

Their mobile app also mirrors these strengths, with a sleek design and a wealth of research tools and educational content.

CMC Markets also shines in its educational and research offerings.

While it could benefit from interactive content and progress tracking in its educational sector, the available resources are extensive and beneficial for traders at all levels.

Their research tools are adept for both beginners and advanced traders, offering detailed technical analysis and fundamental insights.

On the downside, the MetaTrader 4 platform, while improved with additional features, still lags behind in terms of the number of tradeable symbols when compared to their Next Generation platform.

Overall, CMC Markets is a top-tier choice for traders in the UK, especially for those focused on forex and CFD trading.

Its blend of competitive pricing, a comprehensive range of offerings, robust research and educational tools, and a user-friendly platform makes it a standout broker in the industry.

Read my full CMC Markets review.

Minimum depositSpread fees (shares)Markets availableTypes of assets
£00.6%12,000+Shares, share baskets
ETFs, forex, indices,
commodities, bonds

Pros:

  • Competitive pricing, especially in forex trading
  • Over 12,000 tradeable instruments on Next Generation platform
  • Extensive research and educational tools

Cons:

  • Limited tradeable symbols on MetaTrader 4
  • High stock CFD fees
  • Customer support available only 24/5

9. FXCM – Best for advanced technical research

FXCM - Best for advanced technical research

FXCM, a UK-based broker, stands out as a leading choice for spread betting and CFD trading, catering especially to forex traders.

Renowned for its straightforward and speedy account opening process, FXCM provides a user-friendly experience for new clients.

The broker is recognised for its robust technical research tools, including a wide range of technical indicators and high-quality educational content.

These features make FXCM an appealing option for both new and experienced traders.

Additionally, clients should be aware of the high fees for bank withdrawals and the lack of two-step authentication on its trading platforms, which could be a concern for those prioritising security.

FXCM’s web and mobile trading platforms are noted for their customisability and range of order types.

The mobile platform, scoring high for its user-friendliness and variety of order types, also falls short in offering safer login options like two-step or touch/face ID authentication.

In terms of fees, FXCM has an edge with no withdrawal fees for credit/debit cards and no charges on account and deposit fees.

However, an inactivity fee applies after one year, and bank withdrawal fees are considerably high. For those who value cost efficiency, these factors are crucial to consider.

For research and educational resources, FXCM shines with its comprehensive offerings, including interactive charts, trading ideas, and quality news flow.

Their educational tools, such as demo accounts and educational videos, are beneficial for traders at all levels, although availability may vary by country.

Regulated by top-tier authorities like the UK’s FCA, FXCM ensures a safe trading environment. Its parent company is publicly traded, adding an extra layer of credibility and trust.

In conclusion, FXCM is a solid choice for forex and CFD traders who value a user-friendly platform, extensive research tools, and educational resources.

While its product portfolio may be limited for some, its specialised offerings and regulatory compliance make it a trustworthy and competent broker for those focused on forex and CFD trading.

Minimum depositSpread fees (shares)Markets availableTypes of assets
£500.4%440Shares, indices
forex, commodities

Pros:

  • User-friendly account opening process
  • Extensive technical research tools
  • High-quality educational resources

Cons:

  • Limited product portfolio
  • High bank withdrawal fees
  • No two-step authentication on platforms

10. Admirals – Best spread betting broker for MetaTrader users

Admirals - Best spread betting broker for MetaTrader users

Admirals, formerly known as Admiral Markets, has established itself as a formidable player among UK’s spread betting brokers.

Admirals boasts a comprehensive suite of features, including a rich selection of shares, forex, and CFD markets.

Its integration with advanced MetaTrader features, particularly the Supreme add-ons, and the StereoTrader dashboard, enhances the trading experience.

Admirals stands out for its superior investor education, offering a robust array of educational materials.

The platform’s Premium Analytics, featuring tools like Dow Jones News, sentiment analysis from Acuity Trading, and Trading Central signals, further empower traders with insightful research content.

A key strength of Admirals is its regulatory compliance, being authorised by respected entities like the ASIC, CySEC, and the FCA.

This regulatory framework provides a layer of trust and security for traders.

The broker also offers a diverse portfolio, with 6,942 tradeable symbols across various asset classes.

However, Admirals isn’t without its limitations. The broker serves as the sole liquidity provider for its group companies, which might be a concern for some traders.

Additionally, its spreads on commission-free accounts are average, and the maximum contract size is limited on certain accounts.

Admirals presents a compelling option for traders who value educational resources, diverse trading instruments, and a reliable regulatory environment.

Its competitive pricing and the variety of available account types cater to a wide range of traders.

The platform’s emphasis on risk management tools and comprehensive market analytics makes it a sound choice for those looking to navigate the complexities of spread betting in the UK.

Read my full Admirals review.

Minimum depositSpread fees (shares)Markets availableTypes of assets
£1000.4%8,000+Shares, forex
indices, commodities
ETFs

Pros:

  • Extensive range of shares, forex, and CFDs
  • Advanced MetaTrader features and educational content
  • Regulated by ASIC, CySEC, FCA

Cons:

  • Sole liquidity provider for its group
  • Average spreads on commission-free accounts
  • Mobile app still evolving

How to Choose the Best Spread Betting Platform

Choosing the best spread betting platform is crucial to ensure a smooth and successful trading experience.

Potential clients should be careful to pick an established, regulated provider with good reviews and platform reliability. You are holding money with your spread betting provider so should take the same caution you would with any other financial provider like a bank or an investment platform.

Tom Salmon, Managing Director at Spreadex. From our recent interview.

Along with the key rating criteria I used to rank the brokers, here’s what to look for:

  1. Regulation and Safety:
    • Always choose a platform that is regulated by reputable authorities, like the Financial Conduct Authority (FCA) in the UK. Regulation ensures that the platform adheres to strict standards and practices.
    • Ensure that the platform has measures in place to protect your funds, such as segregated accounts and robust encryption.
  2. Range of Markets:
    • A good platform will offer a wide variety of markets to bet on, from stocks and forex to commodities and indices.
    • Consider your interests and the specific markets you want to explore.
  3. Trading Costs:
    • Assess the platform’s spread widths. Narrower spreads generally mean lower trading costs.
    • Check for any additional fees, like overnight financing (also known as the overnight fee or swap rate) or inactivity fees.
  4. Platform Usability:
    • Choose a platform with an intuitive interface, ensuring easy navigation and trading.
    • The platform should be reliable, with minimal downtime.
  5. Trading Tools & Features:
    • Access to advanced charting tools, technical indicators, and real-time news feeds can enhance decision-making.
    • Some platforms may offer risk management tools, like stop-loss or take-profit orders, which can be invaluable.
  6. Leverage Levels:
    • Different platforms offer different leverage limits. Ensure you understand the risks associated with leveraging before making your choice.
  7. Educational Resources:
    • Especially beneficial for beginners, look for platforms that offer educational tools, webinars, and tutorials.
    • A demo account feature is a plus, as it allows you to practice without risking real money.
  8. Customer Support:
    • Reliable customer support is essential. It should be easily reachable and provide prompt and clear assistance.
    • Check for multiple contact methods, such as live chat, phone support, and email.
  9. Deposits & Withdrawals:
    • Ensure the platform provides multiple methods for deposits and withdrawals, including bank transfers, credit cards, e-wallets, etc.
    • Evaluate the speed of withdrawals and whether any fees are involved.
  10. Feedback and Reviews:
    • Look at user reviews and feedback. They can provide insights into the platform’s strengths and weaknesses.
    • However, always take reviews with a pinch of salt, as some may be biased or inauthentic.
  11. Mobile Trading:
    • If you want to trade on the go, ensure the platform has a robust mobile application compatible with your device.
  12. Customisation and Scalability:
    • The ability to customise your trading workspace can improve efficiency.
    • As your trading skills advance, you’ll want a platform that offers advanced features and can scale with your needs.

What Is Spread Betting?

Spread betting is a form of derivatives trading where individuals speculate on the direction of the price movement of various financial instruments without actually owning the underlying asset2.

It’s particularly popular in the UK and Ireland due to its tax benefits.

Here’s a breakdown:

  • Basic Concept:
    • When you spread bet, you bet a certain amount of money per point of movement in the underlying asset’s price. For example, if you bet £10 per point and the asset moves 10 points in the direction you predicted, you would earn £100. Conversely, if it moves 10 points against your prediction, you would lose £100.
  • Buying vs. Selling:
    • If you believe the price of an asset will rise, you ‘buy’ or ‘go long’.
    • If you believe the price will fall, you ‘sell’ or ‘go short’.
  • Leverage:
    • Spread betting is a leveraged product. This means you only need to deposit a small percentage of the total trade value (known as the margin) to gain full exposure. While this can amplify profits, it can also amplify losses, making it possible to lose more than your initial deposit.
  • No Stamp Duty or Capital Gains Tax:
    • In the UK and Ireland, profits from spread betting are free from capital gains tax and stamp duty. However, tax laws can change and may vary based on individual circumstances.
  • Range of Markets:
    • Spread betting isn’t limited to equities. You can bet on a variety of financial markets, including forex, commodities, indices, and more.
  • Spreads:
    • The spread is the difference between the ‘buy’ price and the ‘sell’ price. Platforms make their money from the spread, which is why you’ll often see spread betting platforms advertise “commission-free trading”. This doesn’t mean it’s free; the cost is embedded in the spread.
  • Risks:
    • Due to its leveraged nature, spread betting can result in significant losses as well as gains. Therefore, it’s important to have proper risk management strategies in place, like using stop-loss orders.
  • Duration:
    • Spread bets can be short-term or long-term, ranging from minutes or hours to several months. Some spread bets have an expiration date, while others are rolled over to the next trading session for a fee.
  • Comparison with CFDs:
    • Spread betting is often compared to Contract for Differences (CFDs). While both are forms of leveraged derivatives trading and have many similarities, the primary difference is their tax treatment. In the UK, CFDs are subject to capital gains tax, while spread bets are not.

How to Start Spread Betting in the UK

Starting spread betting in the UK involves a series of steps to ensure you’re well-prepared and informed.

Here’s a step-by-step guide:

  1. Educate Yourself:
    • Understand the basics of spread betting, the risks involved, and how it differs from other forms of trading.
    • Familiarise yourself with trading jargon such as “going long”, “going short”, “spread”, “leverage”, “margin”, etc.
  2. Research Markets:
    • Decide which markets you’re interested in. Spread betting is available across a range of markets, including forex, stocks, indices, commodities, and more.
    • Stay updated on market news and trends. Economic and political events can significantly impact market movements.
  3. Choose a Reputable Spread Betting Provider:
    • Look for brokers regulated by the Financial Conduct Authority (FCA) in the UK.
    • Consider factors such as the platform’s user-friendliness, available research tools, educational resources, spread sizes, and customer support.
    • Many providers offer demo accounts. Use these to practice and familiarise yourself with the platform before committing real money.
  4. Open an Account:
    • This usually involves filling out an online application form.
    • You’ll need to provide proof of identity (e.g., passport or driving license) and proof of address (e.g., utility bill or bank statement).
    • The provider may assess your suitability for spread betting based on your trading experience and financial situation.
  5. Plan Your Trades:
    • Determine your risk tolerance and set a budget.
    • Set clear objectives and decide in advance how much you’re willing to lose on a particular trade.
    • Use risk management tools like stop-loss orders to limit potential losses.
  6. Start Trading:
    • Choose the asset you want to bet on.
    • Decide the size of your bet (how much you want to bet per point movement).
    • Predict the direction of the market: Buy (long) if you think the market will rise, or sell (short) if you think it will fall.
  7. Monitor Your Trades:
    • Regularly check on open positions and make adjustments if necessary.
    • Stay informed about market news that might impact your trades.
  8. Evaluate and Learn:
    • Regularly review your trades to understand what worked and what didn’t.
    • Continuously educate yourself. Markets evolve, and staying informed will help you adapt your strategies.
  9. Understand the Tax Implications:
    • Profits from spread betting in the UK are currently free from capital gains tax and stamp duty, but it’s crucial to keep abreast of any changes in tax regulations.
  10. Stay Cautious:
    • Spread betting is speculative and can result in significant losses.
    • Only bet with money you can afford to lose. Leveraged products can result in losses exceeding your initial deposit.

What Underlying Assets Can You Place Spread Bets Against?

Spread betting allows individuals to speculate on the price movements of a wide range of underlying assets without actually owning them.

Here are some of the most common underlying assets you can open spread bets against:

  • Indices: This involves betting on the future movements of stock market indices, such as the FTSE 100, S&P 500, Dow Jones, DAX 30, and many others.
  • Shares/Stocks: You can bet on the price movements of individual company shares listed on major global stock exchanges, such as Apple, Microsoft, BP, or Barclays.
  • Forex (Foreign Exchange): This involves currency pairs, where you’re betting on the movements of one currency relative to another. Popular currency pairs include EUR/USD, GBP/USD, and USD/JPY.
  • Commodities: Spread bettors can speculate on the price of various commodities including:
    • Hard commodities: like gold, silver, oil, and other metals.
    • Soft commodities: such as wheat, sugar, cotton, and coffee.
  • Bonds and Interest Rates: This includes government bonds like UK Gilts or US Treasuries, as well as predictions on the future direction of central bank interest rates.
  • Options and Futures: These are more advanced financial instruments where you bet on the future price of an asset at a specific date.

It’s worth noting that the availability of these assets can vary between spread betting brokers.

Also, before diving into spread betting on any underlying asset, it’s crucial to have a clear understanding of that asset, the factors that influence its price, and the associated risks.

Spread Betting vs Stocks Trading

Spread betting and stock trading are two distinct methods of speculating on financial markets, each with its unique traits and potential benefits.

Stock trading involves buying and selling actual shares of a company. When you buy stocks, you gain ownership of a small portion of the company and potentially benefit from dividends and capital appreciation if the stock’s price goes up.

However, you could also lose if the stock’s price falls. It’s considered a form of direct investment, and any gains are usually subject to capital gains tax.

On the other hand, spread betting is a form of derivative trading where you don’t own the underlying asset – in this case, the stocks. Instead, you place a bet on whether you think the price of a particular stock will rise or fall.

The more the price moves in the direction you predicted, the more profit you make, and vice versa.

One major advantage of spread betting, particularly in the UK, is that the profits are currently free from capital gains tax.

However, it’s worth noting that it carries a high level of risk due to the use of leverage, which could magnify losses as well as gains.

The choice between stock trading and spread betting depends on your investment goals, risk tolerance, understanding of the markets, and your tax situation.

While stock trading can provide ownership and potential dividends, spread betting allows for speculation on price movements in either direction and possible tax benefits.

Spread Betting vs CFD Trading

Spread betting and CFD (Contract for Difference) trading are both popular forms of derivative trading, which means that you don’t own the underlying asset but speculate on its price movements.

However, they have key differences in their structure and implications.

With spread betting, you place a bet in the direction in which you believe an asset’s price will move, and your profit or loss is determined by the extent of this movement, multiplied by your stake per ‘point’ or ‘pip’3. It’s denominated in the currency of the underlying market and, in the UK, any profits are currently tax-free.

On the contrary, CFD trading involves agreeing to exchange the difference in the price of an asset from the point at which the contract is opened to when it is closed. CFDs are denominated in your account currency and you might have to pay capital gains tax on any profits.

While both instruments use leverage, meaning you can control a large position with a small deposit, this also magnifies potential losses.

Essentially, the choice between spread betting and CFD trading hinges on individual preferences, risk tolerance, and tax considerations. It’s crucial for traders to fully comprehend the nuances and potential risks of both methods before diving in.

Spread Betting Risk Management Tips

Risk management is a crucial aspect of spread betting, given the inherent risks associated with leveraged products.

Here are some strategies and tools to consider when engaging in spread betting to manage potential losses and protect your investment:

  • Educate Yourself: The more you understand the markets and spread betting as a product, the better you can navigate its complexities. Familiarise yourself with the underlying assets you’re betting on and stay updated with relevant news and economic events.
  • Start with a Demo Account: Many brokers offer demo accounts that allow you to practice spread betting with virtual funds. This helps you understand the platform and refine your strategies without risking real money.
  • Set a Budget: Determine a specific amount you’re willing to risk and stick to it. Never invest money you can’t afford to lose.
  • Use Stop-Loss Orders: A stop-loss order closes out a bet automatically if the market moves against you to a certain extent. It helps limit potential losses. However, in fast-moving markets, there might be instances of ‘gapping’, which could lead to your order being executed at a worse price than anticipated.
  • Consider Take-Profit Orders: These orders automatically close out your position once they reach a set profit level, locking in gains before market conditions can reverse.
  • Use Guaranteed Stop Loss Orders (GSLO): For a premium, some brokers offer GSLOs that guarantee the closing price of your bet, regardless of market gapping.
  • Diversify: Don’t put all your capital into a single bet. By diversifying across different assets and markets, you can spread the risk.
  • Monitor Positions Regularly: Given the volatility of markets, it’s essential to keep a regular check on your open positions and adjust as necessary.
  • Stay Updated: Use economic calendars, news sources, and market analysis to stay informed about events that could affect your positions.
  • Limit Leverage: Just because a broker offers high leverage doesn’t mean you should use it. Higher leverage amplifies both potential profits and losses.
  • Regularly Review Strategy: Periodically review and adjust your spread betting strategies based on past performance and changing market conditions.
  • Avoid Emotional Decisions: It’s easy to get swept up in the emotions of trading, leading to rash decisions4. Whether you’re on a winning streak or facing consecutive losses, try to maintain a level head and stick to your strategy.
  • Use Time Stops: If a position isn’t moving as anticipated within a specific timeframe, consider closing it to free up capital and reduce exposure.

Pros & Cons of Spread Betting

Spread betting, like all investment strategies, has its advantages and disadvantages.

Here’s a breakdown of the pros and cons of spread betting:

Pros of Spread Betting:

  • Tax Efficiency: In the UK and some other jurisdictions, any profits from spread betting are exempt from capital gains tax and stamp duty. This makes it financially attractive for traders.
  • Access to Global Markets: Spread betting platforms often provide access to a wide range of global markets, including indices, forex, commodities, and individual equities.
  • Leverage: This allows you to open a position by depositing just a fraction of the full value of the trade, which can amplify profits. However, it’s worth noting that leverage can also magnify losses.
  • Short Selling: Spread betting enables you to profit from falling markets, not just rising ones. If you believe a particular market or asset will decrease in value, you can “go short” and profit from any potential decline.
  • Diverse Range of Markets: From sports events to political outcomes, in addition to traditional financial instruments, there’s a broad spectrum of markets available for spread betting.
  • No Commissions: Typically, spread betting companies don’t charge direct commissions or fees on trades. Instead, they make their money from the spread between the buying and selling price.
  • Real-time Trading: Many spread betting platforms offer real-time trading, allowing traders to make decisions based on live market data.
  • Customisable: Spread bets can be tailored to suit your financial situation and risk appetite, from the size of the bet to the use of risk-management tools like stop-loss orders.

Cons of Spread Betting:

  • Leverage Risks: While leverage can magnify profits, it can also amplify losses, sometimes even exceeding the initial deposit.
  • Complex Product: Spread betting can be complicated and might not be suitable for everyone, especially beginners. It requires a good understanding of markets and a well-thought-out strategy5.
  • Overnight Financing Costs: If you hold a position overnight, you may be charged a financing cost, which can eat into your profits or increase your losses.
  • Wide Spreads: The spread (difference between the buying and selling price) can be wider compared to traditional trading, especially in less liquid markets.
  • Fast Market Movements: Prices can move rapidly, leading to potential sudden and significant losses.
  • Potential for Large Losses: Without proper risk management, it’s possible to lose more than your initial deposit.
  • Regulatory Differences: Spread betting is not available or legal in all countries and might be regulated differently where it is allowed.
  • Emotional Stress: Due to its speculative nature and the potential for significant financial loss, spread betting can be stressful.

Final Thoughts

In the dynamic world of financial markets, spread betting has emerged as a popular method for traders in the UK to capitalise on market movements.

Given its tax advantages and versatility across various asset classes, it’s no wonder many are drawn to this form of trading.

However, the key to a successful spread betting experience lies in choosing the right spread betting broker.

After testing and reviewing the top spread betting platforms in the UK, it’s evident that each offers unique features catered to different trader needs, from user-friendly interfaces for beginners to advanced analytical tools for seasoned traders.

But, for beginners, I’d recommend Spreadex and IG as the overall best spread betting platforms in the UK.

FAQs

Is spread betting tax-free in the UK?

Yes, in the UK, profits from spread betting are exempt from capital gains tax and stamp duty. This tax-free status is one of the primary attractions for traders using spread betting as a trading method.

Is spread betting regulated in the UK?

Yes, in the UK, spread betting is regulated by the Financial Conduct Authority (FCA). This regulatory body ensures that spread betting providers adhere to strict standards to protect traders and maintain market integrity. Always ensure that a spread betting provider is FCA-regulated before engaging in trading activities.

Is spread betting legal in the UK?

Yes, spread betting is legal in the UK and is regulated by the Financial Conduct Authority (FCA) to ensure fair practices and to protect traders.

Is spread betting safe?

Spread betting carries inherent risks due to its speculative nature, but its safety in terms of fair practices and protection of traders is ensured in jurisdictions where it’s regulated, such as the UK by the Financial Conduct Authority (FCA). As with all investments, traders need to be well-informed and use risk management strategies.

Is spread betting suitable for beginners?

Spread betting can be complex and may not be suitable for all beginners due to its speculative nature and potential for significant losses. However, with proper education, risk management strategies, and starting with a demo account, a beginner can familiarise themselves with the process before diving into real trades. It’s crucial for beginners to fully understand the risks and mechanics before committing capital.

Is spread betting worth it?

Spread betting can be worth it for those who understand the market, have a clear strategy, and are comfortable with the associated risks. It offers tax-free profits in the UK and provides access to a wide range of markets with a single account. However, it’s essential to remember that losses can exceed initial deposits, so proper risk management is crucial. Whether spread betting is “worth it” largely depends on individual financial goals, market knowledge, and risk tolerance.

What’s the best spread betting app UK?

One of the top spread betting apps in the UK is AvaTrade. It offers a user-friendly interface, a wide range of markets, and advanced trading tools. While there are several reputable spread betting apps available, AvaTrade stands out for its ease of use, comprehensive educational resources, and strong regulatory framework. However, it’s always important for traders to do their research and choose an app that best fits their individual needs and trading style.

What’s the best spread betting broker UK?

Among the leading spread betting brokers in the UK, IG is highly regarded. Known for its robust platform, extensive market access, and decades of industry experience, IG maintains a strong reputation for reliability and service. While there are many spread betting brokers in the UK, IG’s comprehensive offerings, educational resources, and proven track record make it a standout choice for many traders.

Is CFD trading or spread betting better?

CFD trading and spread betting both offer ways to speculate on financial markets without owning the underlying asset. Which is better often depends on individual preferences and circumstances. CFD trading involves buying or selling contracts that represent a specific amount of an asset, and you’ll profit or lose based on the price change. Spread betting, on the other hand, involves betting on the direction of price movements. Key differences include the tax treatment in some countries, with spread betting being tax-free in the UK, and the way they are structured and priced. Both have their advantages and potential pitfalls, so it’s essential to understand each fully and consider factors like taxes, fees, and personal strategy before deciding which is more suitable for you.

Is spread betting profitable?

Spread betting can be profitable, but it also comes with significant risks. Success in spread betting depends on accurate market predictions, a clear understanding of the system, and effective risk management strategies6. While some traders achieve consistent profits, others may incur losses, especially if market conditions are volatile or if they lack a well-defined trading strategy. As with any form of speculative trading, there’s no guaranteed way to always make a profit. Individuals need to educate themselves, practice with demo accounts, and only invest what they can afford to lose.

Can you lose money spread betting?

Yes, you can lose money with spread betting. It’s a form of leveraged trading, which means potential profits are magnified, but so are potential losses. If the market doesn’t move in the direction you predicted, you can incur losses that exceed your initial deposit. It’s crucial to understand the risks involved and employ effective risk management strategies when engaging in spread betting.

How do spread betting brokers make money?

Spread betting brokers primarily make money through the spread, which is the difference between the buy and sell price of an asset. They charge traders this difference, meaning traders pay slightly more than the market price to buy and receive slightly less than the market price to sell. Some brokers may also earn from overnight financing charges or inactivity fees. It’s important to understand a broker’s fee structure before trading.

What sports spread betting companies are in the UK?

In the UK, several key players dominate the sports spread betting market. Spreadex is notable for combining sports and financial spread betting on a single platform. Sporting Index is another specialist that exclusively focuses on sports spread betting, offering a wide range of markets. These companies are regulated by the UK’s Financial Conduct Authority (FCA), ensuring they adhere to strict financial standards.

How does spread betting work UK?

Spread betting in the UK involves placing a bet on whether you think a market will rise or fall. The ‘spread’ is the range set by the betting broker on a particular outcome. If you believe the outcome will be higher than the spread, you ‘buy’, and if you think it will be lower, you ‘sell’. Your profit or loss is determined by how much the outcome deviates from the spread, multiplied by your stake per point of movement.

What is the best forex spread betting broker UK?

The best forex spread betting broker in the UK can vary based on trader needs, but IG is rated highly for its comprehensive platform and competitive spreads. It offers a wide range of currency pairs and is known for its robust trading tools and strong regulatory compliance. Other notable mentions include Spreadex and City Index, which also provide user-friendly platforms and extensive market access. These brokers are all regulated by the Financial Conduct Authority (FCA), ensuring a secure trading environment.

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Sources:

  1. https://www.finder.com/uk/investment-statistics ↩︎
  2. https://www.lse.ac.uk/accounting/assets/CARR/documents/R-R/2013-Winter/CARRmagRR26-Loussouarn.pdf ↩︎
  3. https://www.brookes.ac.uk/getmedia/119a7d15-c303-4502-9053-98db21453354/pub70.pdf ↩︎
  4. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4713085/ ↩︎
  5. https://openaccess.city.ac.uk/id/eprint/8431/1/A_statistical_approach_to_sports_betting.pdf ↩︎
  6. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10306238/ ↩︎
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Will Fenton is the founder of Sterling Savvy. He is a personal finance expert and writes about trading, investing, budgeting, and other financial topics.

Along with his education in Economics & Finance, he has experience working in the financial services industry in London working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”.

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