Spread betting is a derivative product, available mainly to UK and Irish residents, that lets traders speculate on price movements by betting a stake per point of movement rather than buying a contract outright — similar in mechanics to a CFD but structured and taxed differently. Profits from spread betting are typically exempt from capital gains tax in the UK, which is its main practical advantage over CFDs.
Like CFDs, spread bets are leveraged and can lose more than the initial stake without negative balance protection, and they carry the same underlying market risk.
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Spreads, Commissions and the Real Cost of a Trade
Spread, commission and swap are the three costs on every forex trade — what each one is, when spreads widen, and how to compare pricing fairly.