UK Spread Betting

When spread betting in the UK, many investors will want:

  • A wide range of UK and International markets – including Indices, Currencies, Commodities and Share Trading Markets
  • Online and phone trading
  • A regulated company

They will also want the usual spread betting benefits of:

  • Tax free trading – spread betting is tax free in the UK and Ireland*
  • Two way trading – ie being able to speculate on markets to go up or down
  • Companies that are open during UK trading hours
  • Being able to trade world markets like US Shares, Oil and the Indian Nifty 50 Index but still having a trading account in Sterling
Each of the following companies offers the above benefits.

UK Spread Betting – Companies Serving the UK Market

User Ratings 7.6 6.6 6.7 7.1
Web Platform Spread Betting Accounts Spread Betting Accounts Spread Betting Accounts Spread Betting Accounts
Mobile App(s) iPhone App iPhone App iPhone App iPhone App
iPad App iPad App iPad App iPad App iPad App
24 Hour Trading 24 Hour Trading with Financial Spreads 24 Hour Trading with City Index 24 Hour Trading with ETX Capital 24 Hour Trading with CMC Markets
Live Charts Financial Spreads City Index ETX Capital CMC Markets
Stop Loss Available Financial Spreads Stop Loss Orders City Index Stop Loss Orders ETX Capital Stop Loss Orders CMC Markets Stop Loss Orders
Automatic Stop Loss Automatic Stop Loss on Financial Spreads Trades Automatic Stop Loss on City Index Trades Automatic Stop Loss on ETX Capital Trades Automatic Stop Loss on CMC Markets Trades
FCA Authorised and Regulated Financial Spreads City Index ETX Capital CMC Markets
Comparison Notes.

Note that spread betting accounts are generally subject to status and/or credit checks.

UK and International Indices Spread Betting Comparison

There are a number of UK facing spread betting companies, each of the firms offers trading accounts in GBP. So whether you are looking to trade UK Shares, US Oil, German Shares or the Hong Kong Hang Seng you can trade them all from your GBP denominated account.

UK and Global Stock Index Markets

Typical In-Hours Spread Sizes

FTSE 100 (UK 100) Daily 0.8 1 1 2
Dow Jones (Wall St) Daily 1 1 1 1.4
DAX 30 (Germany 30) Daily 1 1 1 1
S&P 500 (SPX 500) Daily 3 4 5 5
NASDAQ 100 (US Tech 100) Daily 5 4-10 3 1
CAC 40 (France 40) Daily 0.8 1 1 1
ASX 200 (Australia 200) Daily 1 5 3 1
Japan 225 Daily 8 8 13 5
Hong Kong Daily 8 10 20 7
Stock Indices – Minimum Stake £1 £1 £0.5 £1
Comparison Notes.

24 Hour Spread Betting in the UK

The London Stock Exchange may close at 4.30pm local time, however, you can now trade a number of UK based markets like the FTSE 100 and a variety of currency markets, like EUR/GBP, GBP/USD and GBP/JPY, throughout the night. For more details see 24 Hour Spreads.

Trading UK Shares

If you are looking to trade UK shares we now have over 200 share based spread betting examples covering the top UK listed companies.

UK Spread Betting Example – A FTSE 100 Company

If an investor wants to speculate on firms like Barclays then one possibility is to spread bet on the Barclays share price.

Looking at a financial spread betting site like InterTrader, you can see that they have priced the Barclays Rolling Daily market at 235.1p – 235.5p. Therefore, you can spread bet on the Barclays share price:

  Barclays Spread Betting Example Increasing higher than 235.5p, or
  Barclays Spread Trading Example Decreasing lower than 235.1p

Whilst financial spread betting on UK equities you trade in £x per penny. Therefore, if you decide to have a stake of £2 per penny and the Barclays shares move 36p then that would alter your P&L by £72. £2 per penny x 36p = £72.

Rolling Daily Equities Markets

One important thing to note is that this is a Rolling Daily Market and so unlike a normal spread betting futures market, there is no settlement date. You do not have to close your position, should it still be open at the end of the trading day, it will roll over to the next session.

If you do let your trade roll over into the next day and are spread betting on the market to:

  Barclays Spread Trading Example Go higher – then you’ll be charged a small overnight financing fee, or
  Barclays Spread Trading Example Go lower – then you’ll normally receive a small credit to your account

Our Rolling Daily spread betting article goes into more detail about Rolling Daily Markets and includes a fully worked example.

Barclays Rolling Daily

So, if you continue with the spread of 235.1p – 235.5p and make the assumptions:

  • You have done your stock market research, and
  • Your analysis suggests the Barclays shares will push higher than 235.5p
Then you may decide that you want to buy at 235.5p and risk, let’s say, £15 per penny.

This means that you win £15 for every penny that the Barclays shares increase and go above 235.5p. Nevertheless, it also means that you will make a loss of £15 for every penny that the Barclays market moves below 235.5p.

Looked at another way, should you ‘Buy’ a spread bet then your P&L is worked out by taking the difference between the closing price of the market and the price you bought the market at. You then multiply that difference in price by your stake.

With this in mind, if after a few days the stock moved higher then you might want to close your trade so that you can secure your profit.

If that happened then the spread, set by the spread betting company, might move up to 243.7p – 244.1p. In order to close your position you would sell at 243.7p. So, with the same £15 stake your profit would be calculated as:

Your P&L = (Closing Price – Opening Price) x stake
Your P&L = (243.7p – 235.5p) x £15 per penny stake
Your P&L = 8.2p x £15 per penny stake
Your P&L = £123.00 profit

Trading shares, by spread betting or otherwise, may not go to plan. In the above example, you had bet that the share price would increase. Of course, it could go down.

If the Barclays share price had started to drop then you might decide to settle/close your position to stop any further losses.

Should the spread pull back to 228.4p – 228.8p then this means you would close your spread bet by selling at 228.4p. Accordingly, your loss would be:

Your P&L = (Closing Price – Opening Price) x stake
Your P&L = (228.4p – 235.5p) x £15 per penny stake
Your P&L = -7.1p x £15 per penny stake
Your P&L = -£106.50 loss

Note – Barclays Rolling Daily equities market correct as of 25-Oct-12.

Where to Spread Bet on UK Shares?

Each of the firms in the tables above offers spread betting on FTSE 100 companies.

IG Index will also offer markets on FTSE 250 companies. also offers FTSE 250 companies as well as a selection of UK Small Cap and AIM listed companies.

UK and Global Forex Markets

Typical In-Hours Spread Sizes

EUR / USD Daily 0.7 1 0.7 0.7
GBP / USD Daily 1 1.5 0.9 0.9
EUR / GBP Daily 0.8 1.3 1.5 0.9
USD / JPY Daily 0.8 1 0.9 0.7
Forex – Minimum Stake £1 £1 £0.5 £1
Comparison Notes.

As the above shows, naturally you can trade GBP/USD and EUR/GBP. However, other Sterling markets include: GBP/AUD, GBP/CAD, GBP/CHF, EUR/GBP, GBP/JPY and GBP/NZD.