Spread betting companies in the UK

Without owning the asset, you enter a contract called a spread bet and bet on whether its market price rises or falls. Under the FCA Handbook, it counts as a contract for differences and also as a gaming contract covered by the Gaming Act 1968. Legally speaking, you're playing a game of chance where the winnings are money.

Opening a spread betting account means trading the same price movements that CFD trading uses. A CFD, which stands for contract for difference, is an agreement to exchange an asset's price difference between opening and closing a trade. Both products use leverage. Leverage means controlling a large position with a small deposit, which multiplies both your profits and your losses. Our guide to what spread betting is explains how stakes work.

Some FCA authorised brokers don't offer spread betting at all. Certain firms limit what they offer to CFDs and share dealing. On our register of spread betting brokers UK traders can use, you'll see ActivTrades, Capital.com, CMC Markets, FxPro, IG, Pepperstone, Spreadex and Vantage.

Each firm in this group operates a web or mobile app of its own. Most of them also let you trade via TradingView, cTrader or MetaTrader. Here we compare each firm's platforms and other trading products so you can see what it offers.

In 2019, the FCA restricted the sale of CFDs and leveraged spread bets to retail customers under rulebook section COBS 22.5. When you open a retail account, you're covered by leverage limits and client loss protections. If your deposit gets too low, your broker has to close out your positions automatically. With negative balance protection, you also can't lose more than the stake you put in. These rules, according to the FCA, mean nearly 400,000 people a year avoid risking more than their original stake, and they deliver protection worth between £267m and £451m.

Your deposits also go into a segregated client money account. Your money sits in a segregated client money account, a bank account that holds it apart from the broker's company funds in case the business fails. If a broker talks you into an elective professional account, or sends you to an offshore firm, you'll lose these safeguards. According to the FCA, more than 90,000 people lost around £75m across a 4 year period at one unregulated offshore firm promoted on social media.

Every FCA firm selling leveraged spread bets must also show a standardised risk warning on its website. The warning gives the exact percentage of the firm's retail investor accounts that lost money. Every 3 months, firms must work out that figure again, covering the 12 month period before it.

Betting and gambling aren't treated as trading for UK tax purposes, under HMRC Business Income Manual section BIM22015. If a private individual places a financial spread bet, HMRC doesn't treat that as carrying on a trade, unless the narrow business exceptions in section BIM22020 apply. That means your spread betting profits are not subject to income tax or capital gains tax, and a loss leaves you with no tax relief to claim. Instead, the bookmaker that organises the spread bet is the one HMRC taxes, on its own profits. There's more on this in our guide about whether spread betting is tax free.