Spread Betting
Spread betting is a UK and Irish tax-advantaged derivative format where you bet per point of price movement, never owning the asset.
Spread betting bets a fixed amount per point of price movement, popular in the UK and Ireland for its tax advantages. The mechanics mirror CFD trading and FCA regulation applies.
Spread betting is a derivative format, popular in the UK and Ireland, where you bet a fixed amount per point of price movement in an instrument. It is tax-advantaged in those jurisdictions, with no stamp duty and, for most traders, no capital gains tax on profits, and it is exempt from UK gambling duty for the bookmaker. The mechanics match CFD trading: leveraged, trade the price not the asset, and regulated by the FCA. Because of the tax treatment it is often the preferred retail wrapper in the UK.
How It Works
- Bet amount per point, e.g. £5 per point on EUR/USD
- Leveraged, trade the price not the asset
- UK/Ireland tax advantages for most retail traders
Trading Tips
The tax edge is real but the risk profile is identical to CFDs
Losses can exceed deposits with leverage - treat the bet size like a position size
FCA-regulated spread betting brokers must show the retail loss disclosure
Spread Betting Example
Say you bet 10 pounds per point that the FTSE rises from 8,000 to 8,200. The 200-point move banks 2,000 pounds with no stamp duty and no capital gains tax for most UK traders. The same trade as a CFD would face tax paperwork on the gain.
How Traders Use Spread Betting
UK and Irish traders should price spread betting against CFDs after tax, not before. Wide spreads can erase the tax edge for scalpers, while position traders keep nearly all of it. Never use it where it is not tax-advantaged.
Related Terms
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