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Trade Responsibly. riskWarning_japaneseDescriptionriskWarning_brazilianDescriptionTrade Responsibly.Trade Responsibly.CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.90% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.CFDs and Spread Betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.59% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider. You should consider whether you understand how CFDs and Spread Betting work and whether you can afford to take the high risk of losing your money.
riskWarning_japaneseDescriptionriskWarning_brazilianDescriptionInvest Responsibly: Trading CFDs involves significant risks.

What is Spread Betting?

Spread Betting is a flexible and tax-free* way to trade financial instruments including Forex, Shares, Spot Indices, Spot Metals and Spot Energies. Spread Betting is a form of derivatives trading, which means you aren’t taking ownership of the underlying asset. You open a position based on whether you think the value of an instrument will rise or fall. If the asset price moves in your favour, you profit, if it goes against you, you incur a loss.

What is Spread?

The spread in Spread Betting refers to the difference between the buy (or ask) price and the sell (or bid) price. Unlike CFD trading, Spread Betting doesn’t involve trading lots of currency or a number of shares. Instead, you buy or sell a certain amount of the instrument you are trading, which is referred to as your stake.

Spread Betting is a leveraged product. This means that you can open a larger position without having to put up the full capital. Your profit or loss is then calculated by multiplying your stake by the number of points the market moves.

The Benefits of Spread Betting

Profits are tax-free*
No stamp duty to pay
No commission
Trade on rising and falling markets
Open larger market positions using leverage
Trade hundreds of financial instruments 24/5

Is Spread Betting Suitable for Me?

As a leveraged financial product, Spread Betting has the potential to be profitable albeit involving a certain amount of risk. As such, Spread Betting may be more suitable for active traders that are:

Interested in tax-free* profits
Looking for short-term opportunities
Interested in diversifying their portfolio
Relatively experienced in online trading

Tax laws are subject to change and depend on individual circumstances.

How Spread Betting Works

Unlike other forms of online trading, Spread Betting doesn’t involve trading lots of currency or a number of shares. Instead, you buy or sell a certain amount of the instrument you are trading. This is referred to as your stake. Your profit or loss is then determined by multiplying your stake by the number of points the market moves.

When Spread Betting, if you think the asset price will rise, you place a buy order (or go long). If you think the price will fall, you place a sell order (or go short). The spread is the difference between the buy and the sell price.

How to Spread Bet

A typical Spread Bet works as follows:

1. Choose an instrument

Choose from hundreds of instruments across Forex, Shares, Spot Indices, Spot Metals and Spot Energies.

2. Take your position

Trade both rising and falling markets. If you think an asset’s price will rise, go long. If you think it will fall, go short.

3. Set your stake

Decide how much capital to invest per point of market movement.

4. Manage your risk

Set your stop-loss and take-profit levels to effectively manage your risk.

5. Place your trade

Place your trade by clicking on either ‘Buy’ or ‘Sell’.

6. Monitor the market

You can manually close your trade at any time, regardless of your stop-loss and take-profit levels.

Spread Betting Examples

Example A
Going Long

The currency pair EUR/USD is trading at a buy price of 1.11095 and a sell price of 1.11085. You believe that the value of the euro will rise against that of the dollar, so you decide to go long on EUR/USD and set a stake of £5 per point movement at 1.11095.

The market proceeds to move in your favour and the sell price of EUR/USD rises to 1.11165, so you decide to close your trade. Your profit would be calculated as follows:

Profit = [1.11165 (sell price) – 1.11095 (buy price)] x 5 (stake)
This means your total profit from this trade would be equal to £35.
Example B
Going Short

Shares in IBM are trading at a sell price of 150.30 and a buy price of 150.68. You anticipate that the value of the shares will decrease, so you decide to go short and set a stake of £2 per point movement at 150.30.

On this occasion, the market moves against you and the buy price for IBM shares rises to 151.08, so you close your trade. In this situation, your loss would be calculated as follows:

Loss = [151.08 (buy price) – 150.30 (sell price)] x 2 (stake)
This means that your total loss from this trade would equal £156.