This content is free thanks to our sponsors
Sponsored Ad – I may earn a commission if you click and buy
Finance
Spread Betting
A leveraged way to speculate on the price movement of financial markets — betting a fixed amount per point of price movement, with profits and losses tax-free in the UK.
Spread betting works on almost every market: indices (FTSE 100, S&P 500, DAX), forex pairs, individual shares, commodities, bonds, and cryptocurrencies — all from a single account. The bet size is expressed in £ per point: £1/point means every 1-point move in the market makes or loses £1. Leverage is substantial — a £1,000 deposit might control a position worth £10,000-£30,000 depending on the market and broker margin requirements.
The critical risk: margin calls. If the market moves sharply against your position, you may be required to deposit more money immediately or have your position automatically closed at a loss. Unlike buying actual shares (where you can hold indefinitely and wait for recovery), a leveraged spread bet can be forcibly closed before the market recovers. The FCA requires spread betting providers to display the percentage of retail client accounts that lose money — it's typically 70-80%, which is a prominently visible warning on every broker's platform. The tax advantage is real; the risk of ruin without strict risk management is equally real.