Commissions

Spread Co does not charge you commissions for opening or closing a Spread Bet. The prices quoted by Spread Co on the trading platform or over the telephone are live prices and include any price adjustments from the underlying market prices to cover our fees. This creates price transparency, giving you efficient execution on a given trading instrument at the spreads you can see in front of you, which are updated in real-time.

Financing

Spread Betting is traded on margin and therefore utilises leverage. The leverage embedded in each Spread Betting contract varies depending on the financial instrument that is being bought or sold. Financing is the cost of borrowing or lending that is attributable to an open position. It is calculated on equities, indices and commodities trades that are held open overnight. Trades that are opened and closed on the same day do not attract financing.

For each day you hold an open position, Spread Co will adjust the price to account for any financing of the nominal trade. These financing cash flows (debits or credits) are applied to the open trade automatically and reflected in the price adjustment at the end of the trading day (assuming the trade is not closed before the end of the day).

Typically if you have gone long (bought an instrument), you will incur a financing charge. Similarly if you have gone short (sold an instrument), you may receive a financing credit.

See an example on Financing.

Rollover Adjustment

For foreign exchange trades you will need to pay rollover interest charges if you go short the currency with the higher interest rate in the pair and you will earn rollover credits if you go long the currency with the higher interest rate in the pair.

Foreign exchange rollover takes place when the settlement of a trade is rolled forward to the next value date with the cost of this process being based on the interest rate differential between the two currencies.

For each day you hold an open position, Spread Co will adjust the price to account for any rollover adjustment. These rollover adjustment to cash flows (debits or credits) are applied to the open trade automatically and reflected in the price adjustment at the end of the trading day (assuming the open position is not closed before the end of the day).

Corporate Actions

If you Spread Bet on individual equities, you will be entitled to corporate actions such as dividends. Spread Co will make adjustments to trades that are open at the close of business the day prior to the ex-dividend event.

If you have gone long (bought), you will receive a dividend credit (less a charge by Spread Co). This receipt will be adjusted into the price at which you first entered the trade. Similarly if you have gone short (sold), you will be charged the dividend payment. Again your trade price will be adjusted to reflect this payment.

See examples of how dividends impact your positions.

Risks

Spread Betting carries above average risk and is not for everyone, so please ensure that you understand the risks fully before opening an account. You should be aware that because Spread Betting is a leveraged product, it is possible to lose more money than your initial deposit and that you may be required to make further deposits at short notice. For full details, please read our Risk Warning.