What is spread betting?

Placing a spread bet means choosing a stake in pounds for every point of price movement. A point is just 1 unit of movement in the market price shown on your screen.

For example, say you expect a UK share index to go up, so you place a buy bet of £2 per point. A 10 point rise in the index means you make £20 profit. A 10 point fall instead means you lose £20.

Betting that a price will fall is also possible. Trading apps refer to that as selling. You make £20 if the index drops 10 points and you staked £2 per point on a fall. Bet on a fall and a 10 point rise in the price costs you £20.

**This is how it's worked out: your profit or loss equals your stake per point times how many points the price moved. In short: stake per point, multiplied by points moved, is the formula.

1. Decide if you expect the price to rise or fall, and open your bet that way.
2. Put down how many pounds you risk per point, and make sure the amount stays affordable if you lose.
3. Close the bet whenever you'd like to bank a profit or to stop a loss growing.

Opening a trade on most spread bets doesn't come with a separate commission. You pay through the spread instead. Your ticket shows the sell price and the buy price, and the spread is the small gap between them.

Your broker always quotes 2 prices at one time. The higher price is where you buy, and the lower price is where you sell. That gap gives every new bet a small opening loss, equal to the spread. Before you break even, the price has to move beyond that gap.

Holding a daily bet beyond the end of the day also means paying an overnight financing charge. FCA rules require every firm to work out what percentage of its retail accounts lost money over the past 12 months. Every 3 months, providers must update that figure, and they must keep account records for 5 years. Their risk warning must include every cost, fee, commission and any other charge in the loss figure.

Under UK law, a financial spread bet counts as a kind of contract for differences, known as a CFD. Through a contract for differences, you agree to settle in cash the price change of an asset, without owning it. Our spread betting vs CFDs page compares both products.

Opening a spread bet doesn't mean paying the full value of the position upfront. Margin is the deposit your broker freezes from your account to open the bet, while leverage means controlling a much larger trade than that deposit. Our margin calculator shows how much deposit a trade needs.

Your profit or loss is based on the full size of the trade, not on your margin deposit alone. That's why small price moves feel far bigger on your balance. Every UK firm must warn you that these complex instruments carry a high risk of losing money rapidly due to leverage. In 2019, the FCA restricted the sale of CFDs to retail customers by bringing in strict leverage limits.

On 1 bet, a quick price move can go beyond that trade's margin and use up the cash left in your account. At an FCA authorised firm, if you're a UK retail client, your losses can't exceed your account balance. A sudden market jump that wipes out your cash balance means the broker has to absorb the extra loss. You won't be left owing the firm any money.

FCA leverage limits and client loss protections stop nearly 400,000 people a year from risking more than their original stake. Every year, the protection these rules provide is worth between £267m and £451m.

This safety net stays only while you remain a retail client with a UK regulated firm. Don't let a broker pressure you into claiming you're a professional client, or into moving to an offshore firm. That choice takes away your loss limit and may pull your cash from separate client money accounts. Social media finfluencers promoting unregulated offshore brokers are worth watching out for too. At just 1 firm, over 90,000 people lost around £75m across a 4 year period. The FCA crackdown of June 2025 resulted in 50 warning alerts, 7 cease and desist letters and 3 arrests.

Spread betting profits are free from tax for almost every private individual in the UK. The FCA rulebook calls a spread bet a contract for differences, and treats it as a gaming contract too. That second label comes from the Gaming Act 1968.

HMRC states that, since the law classes it as betting, placing a spread bet doesn't normally mean carrying on a trade. When a bet goes your way, you aren't taxable on the profits. Only the bookmaker that organises the spread bet is taxable on its business profits.

There's an important catch with this rule. Your profits aren't taxed, so you get no tax relief on losses. Spread betting losses can't be deducted from your salary or other gains. Our is spread betting tax free page and our spread betting tax in the UK page set out the rules in full.

Spread betting isn't available at every FCA authorised trading firm. Some firms, eToro and XTB among them, provide CFDs and share dealing without any spread betting account.

Among the UK firms we compare, spread betting is available from ActivTrades, Capital.com, CMC Markets, FxPro, IG, Pepperstone, Spreadex and Vantage. On our spread betting companies page, they appear in alphabetical order.

New to trading tickets? You have the option of testing them first on a forex demo account. Virtual funds in demo accounts are offered by ActivTrades, Capital.com, CMC Markets, FxPro, IG, Pepperstone and Vantage. Practise on a demo account and you can see how stakes per point and the spreads work, without risking your own money.