Financial spread betting explained
Spread betting, CFD trading and forex trading are leveraged products which can result in losses greater than your initial deposit.
Spread betting explained
Simply put, spread betting is a tax-free* alternative to conventional trading that enables you speculate on rising as well as falling market prices.
Spread bets offer the ability to potentially profit regardless of whether prices are rising or falling, meaning there are many opportunities to trade.
For example, you may know that Sainsbury’s is about to release quarterly results and have an opinion on whether the figures will have a negative or positive affect on its share price. Either way, you can place a trade using that opinion.
See an example of how you can spread bet with City Index, with our how to spread bet video tutorial.
Spread betting is a leveraged product, which means that you can take a position by initially depositing just a small fraction of the total trade value: usually between 1% and 10%.
For example, the initial deposit (also known as margin requirement) needed to spread bet Apple or Lloyds shares is just 5%. So a position worth £10,000 would require a deposit of just £500.
Remember, with leveraged trading, the potential for profits or losses from your initial outlay of capital is much higher than in traditional trading. If a trade goes against your prediction, you can incur significant losses. And these losses can, in some cases, exceed your initial deposit.
Learn more about how to manage your risk.
Why spread bet with us?
- Low 4% initial deposit on FTSE 100-listed shares
- Tight spreads from 1 point on major indices† – including the UK100 and Germany30
- 24-hour access to prices on 12,000 global markets
- Educational videos, categorised into beginner, intermediate and expert so you can learn at your own pace
- Pick from a range of trading platforms including Advantage Web
- Trade on the go with our mobile trading apps for iPhone, Android and Windows devices
- Free training seminars and webinars with tips from our in-house traders
- Up-to-the-minute market news and analysis from our team of market experts
- Economic calendar listing all the important upcoming events that could trigger market movements