About Spread betting
Spread betting is a convenient way to trade the financial markets. A range of assets are available to trade online, including equities, indices, FX and commodities. Profits from spread betting are tax free* and like CFDs, no stamp duty is currently payable on spread betting transactions. To improve your trading acumen, try our free spread betting demo account or request your spread betting guide.
Spread betting is a trade on whether you think an underlying asset (for example, a share, commodity or currency) will rise or fall. You decide how much money you want to commit to a ‘per point’ basis. For example, you might choose to trade £10 per point on the FTSE 100 index. For every point the market moves in your favour, you make £10. Conversely, for every point the market moves against you, you lose £10. The mechanics are simple, allowing you to devote attention to perfecting your trading strategy.
You can make money from spread betting whether the market (e.g. a share price) moves up or down. This is known as ‘going long’ (making money when the market rises) and ‘going short’ (making money when the market falls). Of course, if the market moves against you (e.g. it goes down when you went long) you’ll make a loss, much like conventional types of trading (e.g. share trading). Spread betting allows you to trade on margin, meaning your profits and losses can be magnified.
Risk management tools are available such as stop-losses, which can limit your risk.
*Under current UK tax law. Tax laws may be subject to change.