Best UK Spread Betting Brokers 2024: Low Spread Forex Brokers

Before you invest in spread betting, it is important to compare the best spread betting brokers to choose the one that offers the best spreads, leverage, deposit & withdrawal options, safety measures and verification processes. This article will discuss spread betting, how it’s different from CFD, and what you should look out for in its broker.

eToro Logo

Online Trading With Commission from $0

Assets:
CFD: YES
Min Deposit: $10
Visit eToro

78% of CFD accounts lose money.

eToro

Min $10

Regulated By

Regulated By

FCA, CYSEC, ASIC, GFSC, FinCEN & FINRA

Used By

Used By

20 Million+ Users

Established in

Established in

2007

Visit Broker

78% of CFD accounts lose money.

Spreads From

EURUSD 1.0 pips

What Can You Trade on eToro

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Platforms

DesktopMobile

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNeteller

Account

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo1.0 pip$0Market$100,000 Open Account
Retail1.0 pip$0Market$50 Open Account
Islamic (Swap Free)1.0 pip$0Market$50 Open Account
Professional1.0 pip$0Market$50 Open Account
Open account table

Capital.com

Min $20

Regulated By

Regulated By

FCA, ASIC, CYSEC & FSA

Used By

Used By

427,000+ Traders

Established in

Established in

2016

Visit Broker

76% of CFD accounts lose money.

Spreads From

EURUSD 0.6 pips

What Can You Trade on Capital.com

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Platforms

DesktopMobileMT4

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNetellerUnionPayTrustlyiDealSofortWebMoneyWorldPay

Account

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Retail0.6 pip$0Market$20 Open Account
Professional0.6 pip$0Market$20 Open Account
Open account table

Plus500

Min $100

Regulated By

Regulated By

FCA, ASIC, CYSEC, FMA & FSCA

Used By

Used By

22 Million+ Customers

Established in

Established in

2008

Visit Broker

74% of CFD accounts lose money.

Spreads From

EURUSD 0.8 pips

What Can You Trade on Plus500

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Platforms

DesktopMobile

Funding Methods

Wire TransferVisaMaster CardPaypalSkrill

Account

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo0.8 pip$0Market$40,000 Open Account
Standard0.8 pip$0Market$100 Open Account
Professional0.8 pip$0Market$100 Open Account
Open account table

Pepperstone

Min $10

Regulated By

Regulated By

FCA, ASIC, CYSEC, CMA, BaFin, DFSA & SCB

Used By

Used By

300,000+ Traders

Established in

Established in

2010

Visit Broker

74% of CFD accounts lose money.

Spreads From

EURUSD 0.6 pips

What Can You Trade on Pepperstone

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Platforms

MT4MT5cTrader

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNetellerUnionPayBPayPOLi Transfer

Account

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo1.0 pip$0Market$200 Open Account
Standard1.0 pip$0Market$10 Open Account
Razor0 pip$7 per lotMarket$10 Open Account
Professional0 pip$7 per lotMarket$0 Open Account
Islamic (Swap Free)1.0 pip$0Market$200 Open Account
Open account table

Admirals

Min $25

Regulated By

Regulated By

FCA, CYSEC, ASIC, JSC & FSCA.

Used By

Used By

1,000,000+ Users

Established in

Established in

2001

Visit Broker

79% of CFD accounts lose money.

Spreads From

EURUSD 0.1 pips

What Can You Trade on Admirals

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Platforms

DesktopMobileMT4MT5

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNeteller

Account

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo0.1 pip$0Market$10,000 Open Account
Trade.MT4/MT50.1 pipFrom $0.02Market$25 Open Account
Zero.MT4/MT50 pipFrom $0.05Market$25 Open Account
Invest.MT50 pipFrom $0.02Market$1 Open Account
Islamic.MT5(Swap Free)0.1 pipFrom $0.02Market$25 Open Account
Bets.MT50.1 pip$0Market£100 Open Account
Professional0 pipFrom $0.05Market$25 Open Account
Open account table

eToro

Min $10

Visit Broker

78% of CFD accounts lose money.

Regulated By

Regulated By

FCA, CYSEC, ASIC, GFSC, FinCEN & FINRA

Used By

Uused By

20 Million+ Users

Established in

Established in

2007

Spreads From

EURUSD 1.0 Points

Platforms

DesktopMobile

What Can You Trade on eToro

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNeteller

Accounts

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo1.0 pip$0Market$100,000 Open Account
Retail1.0 pip$0Market$50 Open Account
Islamic (Swap Free)1.0 pip$0Market$50 Open Account
Professional1.0 pip$0Market$50 Open Account
Open Account Table

Capital.com

Min $20

Visit Broker

76% of CFD accounts lose money.

Regulated By

Regulated By

FCA, ASIC, CYSEC & FSA

Used By

Uused By

427,000+ Traders

Established in

Established in

2016

Spreads From

EURUSD 0.6 Points

Platforms

DesktopMobileMT4

What Can You Trade on Capital.com

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNetellerUnionPayTrustlyiDealSofortWebMoneyWorldPay

Accounts

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Retail0.6 pip$0Market$20 Open Account
Professional0.6 pip$0Market$20 Open Account
Open Account Table

Plus500

Min $100

Visit Broker

74% of CFD accounts lose money.

Regulated By

Regulated By

FCA, ASIC, CYSEC, FMA & FSCA

Used By

Uused By

22 Million+ Customers

Established in

Established in

2008

Spreads From

EURUSD 0.8 Points

Platforms

DesktopMobile

What Can You Trade on Plus500

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Funding Methods

Wire TransferVisaMaster CardPaypalSkrill

Accounts

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo0.8 pip$0Market$40,000 Open Account
Standard0.8 pip$0Market$100 Open Account
Professional0.8 pip$0Market$100 Open Account
Open Account Table

Pepperstone

Min $10

Visit Broker

74% of CFD accounts lose money.

Regulated By

Regulated By

FCA, ASIC, CYSEC, CMA, BaFin, DFSA & SCB

Used By

Uused By

300,000+ Traders

Established in

Established in

2010

Spreads From

EURUSD 0.6 Points

Platforms

MT4MT5cTrader

What Can You Trade on Pepperstone

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNetellerUnionPayBPayPOLi Transfer

Accounts

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo1.0 pip$0Market$200 Open Account
Standard1.0 pip$0Market$10 Open Account
Razor0 pip$7 per lotMarket$10 Open Account
Professional0 pip$7 per lotMarket$0 Open Account
Islamic (Swap Free)1.0 pip$0Market$200 Open Account
Open Account Table

Admirals

Min $25

Visit Broker

79% of CFD accounts lose money.

Regulated By

Regulated By

FCA, CYSEC, ASIC, JSC & FSCA.

Used By

Uused By

1,000,000+ Users

Established in

Established in

2001

Spreads From

EURUSD 0.1 Points

Platforms

DesktopMobileMT4MT5

What Can You Trade on Admirals

  • Forex
  • Stocks
  • Indices
  • Commodities
  • ETFS
  • Cryptocurrencies

Funding Methods

Wire TransferVisaMaster CardPaypalSkrillNeteller

Accounts

Account TypeEURUSD Spread FromCommissionExecutionMin. DepositChoose Account
Demo0.1 pip$0Market$10,000 Open Account
Trade.MT4/MT50.1 pipFrom $0.02Market$25 Open Account
Zero.MT4/MT50 pipFrom $0.05Market$25 Open Account
Invest.MT50 pipFrom $0.02Market$1 Open Account
Islamic.MT5(Swap Free)0.1 pipFrom $0.02Market$25 Open Account
Bets.MT50.1 pip$0Market£100 Open Account
Professional0 pipFrom $0.05Market$25 Open Account
Open Account Table

Summary

When many people think of investing, they often think of trading stocks, forex, and other common forms of investments. When investing in these instruments, traders expect them to appreciate in value. However, not many people know of less popular investment methods like spread betting, which doesn’t always require that an asset appreciates in value. You can bet on the direction of the asset, both downwards and upwards. 

Spread betting is a method traders use to speculate the direction of an asset. Spread betters can bet that the price of an asset will rise or fall based on their analysis. If the asset moves in their speculated direction, they make a profit. However, if the asset moves in the opposite direction, the trader loses their money. This means that spread betters can make a profit even when the direction of an asset trends downwards. However, it is limited to the UK alone, so traders can’t use this method of derivative trading in other countries globally. 

The choice of a spread betting broker is important, as the best online brokers offer good spreads, reasonable leverages, multiple payment methods, easy-to-use spread betting platforms, and multiple spread betting instruments. This guide will explain spread betting in the UK and show you features you should look out for when selecting a spread betting broker. We will be talking about financial spread betting in this article, which should not be confused with sports spread betting. We will go through the risks associated with spread betting, the tax on spread betting brokers and trading platforms for spread betting. Finally, we will also go through opinions of traders who have done spread betting in the past. We will find out what their best brokers are and some good advice for spread betting beginners.

What are Spread Betting Brokers?

Spread Betting Brokers

Spread betting is a tax-free financial derivative in the UK that allows you to bet on the price movement of an asset without owning the underlying asset. A broker that offers assets like stocks and commodities for traders who wish to carry out spread betting is known as a spread betting broker. 

Spread is the difference between the price at which a trader buys (bid price) and the price at which the trader sells (ask price) an asset. When a trader uses spread betting, the brokers benefit from the spread, so they don’t charge commissions, unlike other types of securities trading.

Spread-betting brokers have existed in different forms since the beginning of the 20th century. In the early 1900s, there were bucket shops on Wall Street where people would go to place bets on the direction of different stocks and other securities. Traders who placed these bets never owned the stocks they bet on, but made or lost money (as the case may be) by predicting the direction of the popular NYSE stocks. Eventually, these shops were outlawed, but that didn’t stop the progress of spread betting brokers.

In the 1970s, it was illegal to trade gold as a speculative investment in the UK. However, a man called Stuart Wheeler found a way around this restriction. Instead of trading gold directly, he gave investors the opportunity to trade on the price of gold. Since no laws were broken by this practice, he was allowed to continue running his company, known as Investors’ Gold Index or IG Index, which later became IG Group. 

More spread betting brokers came out in the 1980s, thanks to the economic boom, and more investors became more receptive to this derivative strategy. Today, they are everywhere, and they have become easily accessible to traders who wish to trade on their desktops, personal computers and even mobile phones.

Pros and Cons of UK Spread Betting Brokers

Pros

  • Zero commission
  • Higher leverages
  • Tax Free
  • Well-Regulated
  • Access to Multiple Trading Platforms
  • Access to Educational Resources
  • Quick Trading Execution
  • Data Protection and Security

Cons

  • Rollover Costs
  • Not Accessible to US Clients

Factors to Consider when Choosing your UK Spread Betting Broker

Before choosing a UK broker for financial spread betting, it is crucial to understand the different factors. After making a list of brokers based on these factors, select the best one and work with them. 

Some factors to consider when selecting a UK spread betting broker include:

Regulation

The primary regulatory body for spread betting brokers in the UK is the Financial Conduct Authority (FCA). So, FCA-regulated brokers should be top of your list. However, there are other secondary regulatory bodies, like:

  • the Prudential Regulation Authority,
  • the Financial Ombudsman Service, and
  • the Financial Services Compensation Scheme.

These bodies ensure that spread betting brokers in the UK keep their clients’ funds separate from the funds in their business accounts. They also require brokers to join the Financial Services Compensation Scheme (FSCS), a scheme that compensates clients if the broker loses money and goes bankrupt. 

It is paramount you confirm that a spread betting broker is regulated by these bodies in the UK before trading with them. A well-regulated broker is safer than an unregulated one.

Trading Platforms

Spread Betting Brokers Trading Platofrms

Although the most commonly used trading platforms are MT4 and MT5, some brokers offer their proprietary trading platforms which capitalise on the benefits of the MetaTrader platforms. Still, some traders prefer trading with MetaTrader platforms, so some brokers offer them along with their proprietary platforms. Find a spread betting broker that offers one or more trading platforms you can choose from.

Spread Betting Instruments

Spread Betting Instruments

Spread betting allows you to trade a wide range of assets without owning those assets. Some examples of assets you can trade are forex, stocks, commodities, and so on. Good spread betting brokers offer you as many assets as possible so you can choose the ones that suit your trading style. When choosing a good UK spread betting broker, ensure you check that it has a wide range of instruments for trading.

Reputation

Thanks to the internet, it is easy to find reviews and opinions of past users of different products and services. Before you choose a spread betting broker, check its reviews on review websites and social media platforms like Reddit and Quora. If a broker has a bad reputation on many online communities and low ratings across multiple review websites, you should avoid that broker. However, if a broker has glowing recommendations from past and expert traders it is worth using.

Spreads

When choosing a broker, choose the ones that offer you low spreads on spread betting. Spread is the difference between the bid and the ask price for any security. Since brokers charge spreads, they don’t take commissions on trades made while spread betting. It is therefore important for traders to ensure that the spread is as tight as possible, so that they don’t lose a lot of money trading. Choose brokers that offer low spreads on spread betting and you will save more.

Leverage

Simply put, leverage involves borrowing money to place trades that normally wouldn’t be possible with a trader’s available funds. To trade with leverage, the broker requires a margin, which is a percentage of the total amount the trader is looking to trade. Every spread betting broker in the UK must abide by the leverage limits set by the European Securities and Markets Authority (ESMA). ESMA requires that the maximum leverage allowed by brokers should be: 

  • 1:30 for major forex pairs 
  • 1:20 for minor forex pairs, gold and major indices 
  • 1:10 for commodities apart from gold and minor equity indices 
  • 1:5 for individual equities 
  • 1:2 for cryptocurrencies 

The FCA has agreed to adopt these rules, so ensure your broker adheres to these rules before trading with them. 

Fees and Commissions

Spreads are the most common fees, but spread betting brokers often charge other fees like deposit & withdrawal fees, overnight/rollover costs, and special order fees. They do not usually take commissions for trading. When selecting a broker, check to see that their fees are low and fine with you before you choose them.

Trading Instruments Available on UK Spread Betting Brokers

Trading instruments are the underlying assets you can trade with spread betting. They are sometimes referred to as securities. Here are some of the common instruments you can trade with spread betting.

Forex Spread Betting

UK Forex Spread Betting

The foreign exchange market is the largest financial market in the world, with traders trading up to $6 trillion worth of major, minor and exotic forex pairs daily. Forex spread betting allows traders to speculate on the movement of these forex pairs without trading directly in the forex market. For example, if the ask price of the GBP/USD pair in a GBP/USD broker is 1.1544 and the bid price is 1.1547, you can place a bet of £1 per point (pip) gain on the pair for a period. If the price moves to 1.1554 (10 pips) at the end of that period, you will make a £1 × 10  or £10 profit. 

Most brokers offer forex spread betting with leverage for traders to bet without owning the assets or trading in the market.

Commodities Spread Betting

UK Commodities Spread Betting

Commodities refer to financial contracts that represent the value of actual goods like natural gas, oil, silver, gold, etc. Given that spread betting in the UK started with betting on gold, it’s not surprising to see that commodities are very common instruments used in spread betting. Brokers offer traders the opportunity to trade on price movements of commodities without owning them.

Indices Spread Betting

UK Indices Spread Betting

Indices measure the performance of a group of shares in a particular exchange. For example, the Dow Jones Industrial Average (DJIA) measures the performance of the 30 largest companies in the NYSE and NASDAQ exchanges, while FTSE 100 tracks the top 100 companies in the London Stock Exchange. Spread betting allows you trade indices without owning any. 

Shares Spread Betting

UK Shares Spread Betting             

Shares are financial contracts used to represent a percentage of ownership in a company. With spread betting, you can bet on the price movements of some popular shares without owning the shares. 

ETFs Spread Betting

UK ETFs Spread Betting

Exchange Traded Funds help track the performance of markets or a group of markets at once. They are often traded on exchanges, like shares and forex. You can speculate the direction of ETFs and place bets on them using spread betting brokers.

Cryptocurrencies Spread Betting

UK ETFs Spread Betting

Cryptocurrencies are decentralised digital currencies without any government control. Due to the lack of government control and other factors, cryptocurrencies are highly volatile and have rapid price movements. You can trade cryptocurrencies without owning the underlying assets by speculating the direction a certain crypto pair will move. However due to its volatility, the FCA has limited the amount of leverage for spread betting on crypto assets to 1:2.   

Trading Platforms Offered By UK Spread Betting Brokers

Trading platforms are computer software brokers use to offer trading services to traders. These platforms have a list of trading instruments, along with charts, news and other tools necessary for traders to analyse before placing bets. Some of the most popular trading platforms for spread betting are:

MT4 Spread Betting Platform/App

MT4 Spread Betting Platform/App

MT4 stands for MetaTrader 4, and it is one of the most common platforms for all forms of trading. It has a simple user interface and allows for automated trading. MT4 also has a mobile app that smartphone users can trade with on the go. The mobile app offers news, analytics, charts, and market notifications on smartphones. 

Most spread betters often go for brokers offering MT4. And, understandably so. MT4 is good for spread betting because it is easy to use and it provides great analytics and real-time news for traders to help their speculation. 

MT5 Spread Betting Platform/App

MT5 Spread Betting Platform/App

MetaTrader 5 is similar to the MT4 platform, but it has a few differences. MT5 has a few more indicators than MT4, allowing for better analytics by spread betters before making speculations. It is also much faster than MT4, and allows traders to monitor the market sentimentality by looking at buying and selling activity. However, it is more complicated, so some amateur traders prefer MT4.

Just like MT4, MT5 also has an app version for smartphone users to study the market and trade on the move. You can download them on the respective Google/Apple app stores.

Proprietary Spread Betting Platforms/Apps

Proprietary Spread Betting Platforms/Apps

While MetaTrader still dominates the trading platforms market, many brokers have begun to create more personalised software to cater for their client’s needs. MetaTrader is exceptional and highly functional, but it lacks some features like live chat and an economic calendar. Proprietary trading platforms are platforms created by brokers specifically for them and their clients. Spread betting brokers like CMC Markets and FXCM have their own proprietary platforms that allow key features like depth of market and economic calendars for their clients. 

These proprietary platforms are also available on mobile devices as apps for those who wish to trade on the go. The mobile app version has all the functionalities of the desktop platform, so traders can see charts and indicators and receive real-time news and notifications on the market. Some brokers offer MetaTrader platforms in addition to their proprietary platforms, so traders can choose the platform they prefer after signing up with them.

Spread Betting Fees & Spreads

Although brokers don’t take commissions for spread betting, traders still have to pay some direct and indirect betting fees. Some of the common fees spread betting brokers charge are:

Spreads

Spread is the most common fee you’ll pay on a spread betting platform. It is the difference between the bid and asks price of an asset or pair, and it varies depending on current market conditions. 

Overnight Fees

If you make daily funded bets, you are required to close the position before midnight, otherwise, you will pay overnight fees. Some brokers charge overnight fees from 10 PM UK time, so ensure to read your broker’s terms before placing daily funded bets.

Guaranteed Stop Loss Premium

You can set a guaranteed stop loss to help deal with slippage, i.e. when the market moves against your trade before your broker can execute the trade. The broker takes a small premium only when a guaranteed stop is triggered. 

Inactivity Fees

Most brokers will charge you a certain amount monthly after leaving your account dormant for a long period (6 months or more).

Other Services

Some brokers will charge you for other services and features like advanced charts or direct market access. However, you can’t get direct market access while spread betting.

What are the Risks Associated with Spread Betting?

Risks Associated with Spread Betting

Spread betting is not risk-free. As a spread better, you are open to some risks that could cause you to lose some money. Some of the common risks associated with spread betting are:

High Leveraged Trading Risk

Leverage trading is good because it allows you to open positions you normally wouldn’t open with your deposit. However, it could be a double-edged sword. Most traders who don’t know much about the risks of leveraged training get carried away and take on a position too large and lose a large amount of money as a result.

A good way to reduce risk by leveraged trading is to trade with a broker that has negative balance protection. This prevents you from losing more than your trading capital and owing the broker. 

Market Volatility

The market can move rapidly against you in a matter of seconds, depending on the asset being traded. If you don’t have a guaranteed stop in place when this happens, you could lose most or all of your trading capital, depending on the severity.

Trading Costs

Spread betting is tax-free and brokers don’t take commissions for trades made. However, there are other trading costs that could cause you to spend more than anticipated. To avoid fees like overnight charges, you should consider using futures to spread bets if you wish to hold positions for many days. 

Financial Spread Betting VS CFD Trading

Financial spread betting and CFD trading are very similar, but there are few slight technical differences. Financial spread betting involves staking an amount of money per point movement of a trading instrument. This means you could stake £10 per point of price movement on a stock, for example, and you will either profit or lose depending on the number of points the stock moved in your direction. 

On the other hand, CFD trading calculates the difference in price from when you open a contract to trade an instrument till when you close the contract. You don’t stake any amount per point, you choose a top CFD broker and buy a contract that represents an amount per point in the market of the underlying asset. 

Another key difference is taxing. Financial spread bets are not taxed for capital gains, but CFDs are liable to get taxed. All losses on CFDs can be offset by future profits for tax profits, making them good for hedging. Also, spread bets have a fixed time scale and can expire, but CFDs have no expiry dates.  

Finally, for CFDs, you pay commissions for share dealing. On the other hand, spread betting brokers do not receive commissions for share dealing. Instead, their commission is calculated along with the spread. 

Financial Spread Betting Vs Forex Spread Betting

Financial spread betting is a trading product that allows you to speculate on the direction of security without owning the security. You can place bets on the number of points a security will move in a certain direction without directly buying that security and adding it to your investment portfolio.

Forex spread betting is a type of financial spread betting that involves betting on the direction of forex pairs. Forex spread betting is just one of the different types of financial spread betting. Other types of financial spread betting are cryptocurrency, index, share, and ETF spread betting.

What is the Tax on Spread Betting in the UK?

Currently, the tax on spread betting in the UK is zero. Spread bets are free from capital gains tax and stamp duty in the UK. 

Are UK Spread Betting Brokers Safe?

Spread betting brokers in the UK take a lot of steps to provide safety for traders’ money and personal information. Some of the safety measures taken by brokers are:

  • Brokers are required to keep traders’ money separate from theirs. They cannot operate their business with traders’ monies.
  • Negative balance protection – This is a system that protects traders from incurring debts when trading with leverage. It prevents the trader from losing more than their trading capital when the market goes against them.
  • Spread-betting brokers must be a part of the Financial Services Compensation Scheme (FSCS), a regulatory body that ensures traders are compensated when their brokers go bankrupt or lose funds. 
  • They must use data protection technology and verification processes like two-factor authentication to protect personal information on their website and apps.

What Reddit & Quora Say About Spread Betting

We decided to go to two renowned social platforms, Reddit and Quora, to see people’s views on spread betting. Here’s what we found out:

Reddit

Reddit is often referred to as the “front page of the internet” because of the ability of Redditors to follow up with trends before the rest of the internet. Almost half a billion people are on Reddit to discuss various topics like sports clothes, celebrity lifestyle and money. We went through hundreds of views on spread betting from different subreddits.

Some Redditors said they weren’t comfortable with spread betting and thought it was gambling. One Redditor in particular likened spread betting sites to gambling platforms, saying that almost 80% of retail investors will lose money spread betting.

What Reddit & Quora Say About Spread Betting

Another Redditor said that while spread betting has its advantages(no tax, etc.), it is still risky and investors should be careful before choosing to trade this way.

What Reddit & Quora Say About Spread Betting    

Another Redditor advised beginner traders to stay away from spread betting, as using leverage wrongly could cause them to lose more money than intended. For advanced investors, the Redditor advised that they use spread betting only when they are sure they want it as part of their trading strategy.

What Reddit & Quora Say About Spread Betting

Quora

Quora is a social platform where millions of people give their opinions on various issues. We went there to find out what people thought about spread betting and if it was considered risky to practise this trading strategy. 

One Quora user talking about spread betting explained all the risks of this product. He then proceeded to state that spread betting has good upsides, but traders should never neglect the downsides of this strategy.

What Reddit & Quora Say About Spread Betting

Another Quora user said that spread betting in itself is not risky, but trading with leverage has its downsides. The access to leverage relative to the amount of capital a trader uses could make a trader lose all their funds if they trade wrongly.

What Reddit & Quora Say About Spread Betting

Another Quora user disagreed with people who regarded financial spread betting as gambling. According to this user, spread betting requires time and understanding for success, unlike gambling which requires blind luck.

What Reddit & Quora Say About Spread Betting

Bottom Line

Financial spread betting means staking some money in the direction in which the price of an asset will move without owning the underlying asset. For example, you can stake £100 per point on the price direction of a share or forex pair. If the price moves according to your prediction, you make £100 for every point it moves. On the other hand, you lose £100 for every point the price moves in the opposite direction. You can bet on many trading instruments, like forex, shares, commodities, ETFs, cryptocurrencies and indices. 

Spread-betting brokers are brokers that offer you platforms for placing bets on the price direction of assets without buying the underlying assets. Before selecting a broker, it is important you get a list of the best ones and compare them using different factors like regulation, spread, leverage, trading instruments available and reputation. Also check if the broker you’re choosing offers multiple trading platforms, like MT4, MT5, or its own proprietary platform.  

Financial spread is similar to contracts for difference (CFD), but there are a few differences. For one, profits from spread bets are not taxed, while profits from CFDs are liable to taxation. Also, CFD brokers charge commissions for share dealing, while spread-betting brokers do not.

UK spread betting brokers are relatively safe because they are regulated by the FCA and follow strict regulations that ensure they safeguard traders’ funds and personal information. These regulations state that they must keep their clients’ funds separate from their business funds and that they must be a part of the FSCS, a compensation scheme that ensures that traders are paid if the broker goes out of business.

Q & A

No. Spread betting is also legal in Canada, Australia, and other countries in the European Union.

Yes, spread betting is heavily regulated, like other forms of trading. In the UK, bodies like the FCA and the FSCS are responsible for regulating brokers.

Some good financial spread betting brokers for beginners are IG, Pepperstone, Capital.com and AvaTrade.

Some spread betting brokers with great apps are CMC Markets, Pepperstone, IG, FXCM, and Spreadex.

Yes, you can spread bet crypto on a spread betting platform.

Financial spread betting or financial betting is a kind of spread betting, which is a general term used to refer to any kind of wagering where the payoff is based on the accuracy of the bet, rather than just a win or lose outcome. There are other types of spread betting like sports spread betting.

Spread betting can be profitable, but it is very risky. If you make the right prediction, your bet will be profitable. On the other hand, you could lose a lot from wrong predictions.

Yes, leverage is key in spread betting and you cannot open a spread bet without leverage.

Some UK spread betting brokers with great spreads are Pepperstone, FXCM, AvaTrade, and ActivTrades. 

To start spread betting, you need to put up a small margin deposit, about 3% of the underlying asset or less. Some brokers will allow you to trade as low as 10 pence per point.