Spread betting is a derivatives product that allows you to trade on the price movements of thousands of financial markets including indices, shares, currencies, commodities and more.
You can use spread bets to speculate on price movements irrespective of whether the markets are rising or falling. If you go long (buy), your profits will rise in line with any increase in that price. If you go short (sell), your profits will rise in line with any fall. Similarly, if you go long on the price and the underlying stock price falls, you will incur losses. See an example of how you can spread bet with City Index.
Spread betting is a margined product that only requires you to deposit a small percentage of the full value of your position. This means that the potential for profits, or losses, from an initial capital outlay is significantly higher than in traditional trading. The margin required is typically between 1% and 10% of the total value of your position, depending on the market. At City Index, we offer prices on over 12,000 spread betting markets. See our Range of Markets section for more information.
What is a Spread?
Just like other forms of trading, including traditional share dealing, we quote two prices for all our spread bets – a buy price (the price at which you can go long if you expect the underlying market to rise) and a sell price (the price at which you can go short if you expect the underlying market price to fall). The difference between the ‘buy’ price and ‘sell’ price is known as the spread.
We quote tight spreads across all our markets, enabling you to maximise your profits, irrespective of whether the markets are rising or falling. We offer some of the tightest spreads in the industry, with 1-point spreads on the UK 100, Wall Street, Germany 30 and France 40. 1-point spreads are available during our market hours only. Spreads lowered on our rolling and daily future spread bet markets. Includes rolling, daily future spread bets and CFDs (excluding CFDs futures).
Features of Financial Spread Betting:
Tax-free Profits*
All profits made in spread betting are exempt from UK Capital Gains Tax*. This automatically saves you a large percentage of your profits that you would normally have to pay if you were to trade the underlying markets. As spread betting is a derivatives product, it is also exempt from UK stamp duty. Tax laws are subject to change and depend on individual circumstances.
24-Hour Dealing
We recognise the importance of being able to access your account and trade whenever you want, wherever you are, particularly when market prices are moving quickly. We therefore give you unrestricted access to your account 24 hours a day, 7 days a week. Furthermore, we run a number of our markets 24 hours a day, including major indices such as the UK 100 and Wall Street, enabling you to spread bet even when the underlying markets are closed.
Leverage
As a leveraged product, spread betting requires you to deposit only a small percentage of the full value of your position - this is known as margin. The margin required is typically between 1% and 10% of the total value of your position, depending on the market you wish to trade.
Our margins for currencies start from just 1%. This means that the potential for profits, or losses, from an initial capital outlay is significantly higher than traditional trading and losses can exceed your initial outlay. See the Market Information sheets in our Range of Markets section, or see the Market Information icons on our online Trading Platform for further details.
Ability To Go Long or Short
With spread betting, you can gain exposure to market movements regardless of the direction in which the markets are moving. If you think the markets are going to rise, you go long on the price (buy). Your profits will rise in line with any increase in that price (your losses will increase in line with any fall in that price).
If, on the other hand, you think the markets will fall you go short on the price (sell). Your profits will rise in line with any fall on that price (and your losses will increase with any rise in price).
Spread betting is one of the few forms of financial trading that enables you to profit from falling market prices.
Wide Range of Markets
With spread betting, you can not only take a position on thousands of individual shares, indices and currencies around the world, but also place trades on sectors, commodities, bonds and interest rates.
Indices such as the UK 100 are some of the most widely traded markets in the world and are especially popular among new traders. We offer some of the tightest spreads available in the market, with 1-point spreads on the UK 100, Wall Street, Germany 30 and France 40. See our range of spread bet markets.
