Spread Betting provides you with a way of trading a wide range of financial instruments without needing to pay the full price of owning the actual instrument. It is also a way for you to sell (or "go short") if you expect an instrument to fall in value, as well as buying ("going long") in the expectation of an increase in value (which is all you can do in normal share trading).
We have described below some of the other benefits of online Spread Betting with us versus many other trading options:
- Access to world markets and a wide selection of financial instruments
- You can trade a wide range of equities, currencies, bullion, commodities and indices with us, all in real time. Our Market information contains a list of instruments available for trading with us.
Opportunity to go short as well as long
Spread Betting gives you way of going short on any instrument, in addition to going long. Going short means selling a Spread Bet on an instrument that you do not own, in order to buy this back at a later date, in the expectation that the price will have fallen between the date that you sell and the date that you buy.
In contrast, going long means buying a Spread Bet on an instrument, in order to sell this at a later date, in the expectation that the price will have risen between the date that you buy and the date that you sell.
Spread Betting is traded on margin. This means you can spread your capital more efficiently over a larger portfolio. These margins are referred to in Spread Betting as the ‘Notional Trading Requirement’ or ‘NTR’. Margins for foreign exchange and index trading are based on a fixed cost per currency unit per point (e.g. GBP 30 for a GBP 1 per point trade on the FTSE100), whilst margins for equity trading depend on the equity and might range between 5 and 20%.
No stamp duty on Individual Share transactions & Tax Free Profits*
There is no stamp duty for you to pay if you Spread Bet on individual shares in the UK. This means that Spread Betting may be a cheaper way for you to get exposed to equities than trading physical shares.
There is no income tax or capital gains tax for you to pay on any profits you make if you Spread Bet in the UK and are a UK resident, because your profits are classed as the winnings of a "bet". This is different to profits from CFD trading, on which Capital Gains Tax is payable for UK residents. *Please note UK tax law can, of course, be changed.
Instant execution of trades
Our trading system shows you the prices that you are trading at. You can place orders or can decide to trade immediately. With our system, you really are in control of your own trading.
Your trades with us will be confirmed almost as soon as you press the buy / sell button on our trading system (provided that your order or trade volume is inside the permitted sizes and that the instrument is priced correctly.) You should only have to wait a few seconds at most for your prices to be confirmed, unless there are unusual market circumstances.
Spread Betting carries above average risk and is not for everyone, so please ensure you understand the risks. You should be aware that it is possible to lose more money than your initial deposit and that you may be required to make further deposits at short notice.
You should not engage in Spread Betting unless you understand the nature of the transaction you are entering into, the risks involved and the true extent of your exposure to the risk of loss. Please see the Risk warning section.