Is Spread Betting for me?

Spread betting is for those who understand the risks associated with trading.

Spread betting shares a number of features with direct share trading. For example:  

  • The potential gains can be considerably higher than you would obtain from an ordinary savings account.
  • Options such as Stop Loss and Limit Orders can help you manage how much risk you take

Also, like investing directly in shares, there’s no guarantee that you’ll make a profit.

There are also differences between spread betting and share trading and one of the key differences is that the deposit you need to put down to place your spread bet is far lower. As it’s a leveraged product, your capital outlay, or margin, is only a percentage of the full trade value.

However, you should always remember that your potential loss can be significantly more than the margin.

 

 

Spread betting or buying shares

Most experts will tell you that buying shares is for longer term investing. If you invest in a fund that buys shares, such as an OEIC, the fund manager will usually recommend an investment term of five years or more. Spread betting is all about taking advantage of short-term investment opportunities. Instead of holding onto an asset for years, spread betting lets you make gains in days, hours or even minutes when markets are volatile.

 

Spread betting has a number of advantages over investing in shares:

  • No capital gains tax – on any profits you make
  • No stamp duty – on your spread betting transactions
  • Potential to profit when values rise or fall – with share investing you only profit if the price of the share rises
  • 24 hour trading - in global forex and bullion markets
  • Lower cost of entry – no stamp duty, no broker commissions and low margins means your capital outlay is far lower than share trading
 

 

Spread betting and other assets

Another advantage of spread betting is that it doesn’t limit your opportunities to company shares. You can trade on indices, currencies and commodities too. If you already have experience in these other markets, spread betting can give you access to tax-free profits.

Coupled with the power and simplicity of our trading platforms, it’s the ideal way to trade these assets for traders with every level of experience.

 
 
 

 

Spread betting with Spread Co

When you spread bet with Spread Co you’ll also enjoy:

  • Tight, fixed spreads – which can be as low as 0.8*
  • No overnight financing - when you go short on equities and indices
  • Wide range of markets - including forex, indices, shares and commodities

    
  
*For spread bets on the UK100 and US30 Index.
Tax laws can change and depend on individual circumstances,tax laws may differ in a jurisdiction other than the UK.

 
 

 

New to spread betting?

If you’re new to spread betting, why not try a free Spread Co demo account? It’s also an opportunity to experience our easy-to-use trading platforms without making any financial commitment.

 
 
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Spread Co Limited is a limited liability company registered in England and Wales with its registered office at 22 Bruton Street, London W1J 6QE. Company No. 05614477. Spread Co Limited is authorised and regulated by the Financial Conduct Authority. Register No. 446677.

Spread betting and CFD trading are leveraged products and can result in losses that exceed your deposits. Ensure you understand the risks.

Losses can exceed deposits. Click here to learn more.