When we refer to spread betting thoughout our material, we are referring to financial spread betting, which is a form of betting that lets you speculate on the future price movements in shares, indices, sectors, precious metals, currencies, options and other instruments.

When spread betting, you need to specify an amount (stake) you want to bet on for each point movement in an underlying investment. You would buy (place an up bet) if you expected the price to rise, or sell (place a down bet) if you thought the price would fall. All of our prices are quoted in sterling.

You only need to deposit a fraction of the value of the bet when you trade. This is referred to as the margin or Notional Trading Requirement (NTR). The margin or NTR required is typically 5%, which means that you can take a larger position than you would by buying the underlying investment. This can translate into bigger profits if you invest the right way, or bigger losses if you invest the wrong way. If your bet moves against you, you may need to make further deposits. This is because you must meet the full value of any losses in your account as well as maintaining the margin. Every bet you make will require a separate margin available in your account.

Most spread bets have an expiry date, which is the date the bet is closed and you settle any profits or losses. You can close a bet before the expiry date by placing an opposing bet or choose to roll a bet over to next expiry date.

Bets that do not have an expiry date are called rolling bets. Rolling bet spreads are more representative of the underlying market price compared to our futures products because they do not include the cost of funding and dividends in the spread. Rolling bets can be kept open as long as you wish. Open positions held over night will be closed and re-opened at the end of day valuation of that market. This will have the effect of realising any profit or loss on your position on a daily basis. You would close a rolling bet position with an opposing bet. While your rolling bet position remains open, your account is debited or credited to reflect financing and dividend adjustments.

All profits or losses from spread bets are free of UK Capital Gains Tax and there is no UK Stamp Duty to pay. Tax laws can change.

See how a spread bet works to find out more.

Spread betting is similar to CFDs in many ways and depending on what your investment goals are one product may be more suitable for you. Find out the differences between CFDs and spread bets.