What is spread betting?

Spread betting explained: stake, points and direction

A spread bet has three inputs: the market, the direction (buy if you think the price will rise, sell if you think it will fall) and the stake per point. A point is the smallest price step the firm quotes on that market: 0.0001 on GBP/USD, 1.0 on a stock index quoted in whole numbers. The firm’s buy price sits above its sell price; you open at one and close at the other. Sell bets work in reverse: at £2 per point you gain when the price falls.

The table below works through a £2-per-point buy on GBP/USD with round illustrative prices, not a quote from any broker. Margin is the exposure divided by 30, the FCA retail cap on major currency pairs.

Margin is a deposit, not the cost of the bet. If the price moves against you, the loss comes out of your balance, and the firm closes positions when equity falls to 50% of the margin they require. Here that is £421.67 of equity.

Margin and leverage on a UK spread bet

The FCA’s permanent restrictions apply to CFDs sold to retail clients, and the FCA says its references to CFDs include financial spread bets and rolling spot forex. Firms must limit leverage to between 30:1 and 2:1, close a position when funds fall to 50% of the margin needed, and make sure a client cannot lose more than the total funds in the account. The rules have applied since 1 August 2019.

• 1:30 on major currency pairs: £843.33 margin on a £25,300 bet.
• 1:20 on other currency pairs, gold and major indices.
• 1:10 on other commodities and indices, 1:5 on shares.
• Spread bets on cryptocurrencies may not be sold to retail clients.

A firm can only lift these limits if it classes you as a professional client, and you then lose the 1:30 cap and negative balance protection with them.

What a spread bet costs

Pepperstone’s UK guide names the spread as the main cost of a spread bet and overnight financing on positions held past the trading day. IG and CMC Markets say their UK spread bet and CFD accounts charge no commission on forex; the cost is in the spread (published terms, checked 19 Oct 2026). On the example above, a spread of 1 point costs £2 the moment the bet opens, because you buy at the higher price and sell at the lower one.

The spread is paid once per bet. Financing is not: a bet held for 30 nights is charged 30 times, so on a position held for weeks it can outweigh the spread. Read the firm’s financing terms before you hold one for days.

Is spread betting tax free?

Section 51 of the Taxation of Chargeable Gains Act 1992 declares that winnings from betting are not chargeable gains. HMRC’s Business Income Manual adds that, for individuals, the profits or losses from gambling or wagering contracts are outside the scope of Income Tax, but not where the bet is used for a commercial purpose such as a hedge, and spread betting wins are taxable when they arise from carrying on a trade.

HMRC’s Capital Gains Manual brings CFD outcomes into the capital gains computation as a gain or an allowable loss; the sources above give spread bets no such treatment, so do not count on setting a spread betting loss against other gains. This is general information, not tax advice; your position depends on your circumstances, so check HMRC guidance or ask a tax adviser. Our guide to forex trading tax in the UK sets out the HMRC sources.

Spread betting strategies: size the stake from the stop

Any forex or index strategy can be traded as a spread bet; what changes is how you size it. Decide how much of the account you will risk on one trade, decide where the stop goes, then divide: £50 at risk with a stop 25 points away gives a stake of £2 per point. Doubling the stake without moving the stop doubles the money at risk on the same chart.

Three habits matter more than the entry signal: a stop on every bet, a total margin well below the account balance so one move cannot trigger the 50% close-out, and a funding check before holding overnight. No strategy removes the risk of loss, and a firm or course that promises regular profits is a warning sign.

• Trend and breakout entries: with £50 at risk, a 50-point stop allows £1 per point and a 25-point stop £2 per point.
• Short-term trades on major pairs: 10 bets a day pay the spread 10 times, so the spread weighs more than overnight funding.
• Hedging a share portfolio with a sell bet on an index: HMRC says a bet used as a hedge can fall outside the gambling treatment.

Spread betting in the UK: who offers it and who regulates it

5 brands in our data list a spread betting account at an FCA-authorised company that accepts UK residents: CMC Markets, IG, Pepperstone, ThinkMarkets and Vantage. First on this guide’s list, sorted by our regulation score: Pepperstone, IG and CMC Markets. At IG the companies are IG Markets Ltd (FRN 195355, checked on the FCA Register on 20 Oct 2026), IG Index Ltd (FRN 114059, checked on the FCA Register on 20 Oct 2026) and IG Trading and Investments Ltd (FRN 944492, checked on the FCA Register on 20 Oct 2026); spread bets sit with IG Index Ltd.

Their UK companies publish the share of retail accounts that lose money: 69% at CMC Markets, 70% at IG, 73.6% at Pepperstone, 75% at ThinkMarkets, 72.65% at Vantage (checked 19 Oct 2026). FSCS investment protection of £85,000 per person per firm (investments) covers the firm failing, not losing bets. For Vantage, third-party reports about a 2021 Malaysian investor alert and its offshore company have not been confirmed with the regulators; they do not concern its UK company, which you can check on the FCA Register.

Try a spread betting demo first

A demo account shows how the stake per point, the margin and the close-out level react before real money is involved. Practise the stop-and-stake arithmetic above on a demo until the margin figure on the ticket matches your own calculation. Our list of demo accounts gives the published demo terms of each broker, checked 19 Oct 2026.