- Tax-free profits: You don’t pay capital gains tax on any profits made from share spread bets.
- No stamp duty: There is no stamp duty to pay as you aren’t taking ownership of the stock. Please note, tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.
- Trade with leverage: Make your capital go furtherYou can open a position by by depositing a percentage of the full value of your position to open a trade. Profits and losses will be based on the full value of the position.
- Profit from falling markets: As you’re able to open a long or short position, you can take advantage of both rising and falling stock prices.
- No commissions: Pay no commissions when you place a buy or sell trade.
- Short-term opportunities: Place quick and cost-effective trades on trending stocks.
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Spread betting vs. Share dealing
Spread betting | Share dealing |
Tax-free profits | Pay tax on profits |
Trade on leverage and deposit a percentage of the full value of the trade. Profits and losses are based on the full value of your position | Buy shares outright and put up the full value of the trade |
Go long or short with the ability to profit on stocks which rise or fall in value | The ability to profit on stocks which rise in value |
No commissions | Subject to commissions |
Trade on a huge range of financial markets | Trade stocks and shaers only |
Suited to shorter-term investment strategies | Suited to long-term investment strategies |
*Please note, tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.
Trade examples
Buy £10,000 worth of Barclays shares at 158p and hold for 1 month.
| Spread bet | Share deal |
Trade value | £10,000 | £10,000 |
Stake* | £63.29/point | 6,329 shares |
Initial outlay* | £2,000 | £10,000 |
Opening share price | 158p | 158p |
Trade duration | 30 days | 30 days |
Closing share price | 171p | 171p |
Profit | £822.78 | £822.78 |
Stamp duty* | £0 | £50 |
Commission* | £0 | £23.90 |
Typical spread costs* | £20 | £0 |
Overnight holding cost* | £26.50 | £0.02 |
Tax on profit* | £0 | £164.56 |
Total cost | £46.50 | £238.48 |
Total profit | £776.28 | £584.31 |
Losing trade example
| Spread bet | Share deal |
Trade value | £10,000 | £10,000 |
Stake* | £63.29/point | 6,329 shares |
Initial outlay* | £2,000 | £10,000 |
Opening share price | 158p | 158p |
Trade duration | 30 days | 30 days |
Closing share price | 153p | 153p |
Loss | -£316.45 | -£316.45 |
Stamp duty* | £0 | £50 |
Commission* | £0 | £23.90 |
Typical spread costs* | £20 | £0 |
Overnight holding cost* | £26.50 | £0.02 |
Tax on profit* | £0 | £0 |
Total cost | £46.50 | £73.92 |
Total loss | -£362.95 | -£390.37 |
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How spread betting may fit into your investment strategy
- Hedge your existing shares portfolio: If you have built up a portfolio of stocks which you want to hold for the long term, a short spread betting position can be a good way to offset slides in the market.
- Short-term opportunities: Spread betting can be a quick, cost-effective way to trade on trending growth stocks.
- Make your own decisions: If you are looking for more independent control over your investment decisions, spread betting with an execution-only provider could be a good option.
- Looking to diversify: If you’re interested in diversifying your investment strategy, spread betting allows you to trade on shares as well as a range of other financial markets.
- Shares & ETFs: Take a position on thousands of global shares and ETFs. You can trade on popular shares like Apple, Netflix and Lloyds, as well as trending growth stocks.
- Forex pairs: You can trade on a range of major, minor or emerging currency pairs, including EUR/USD, GBP/USD, GBP/JPY and USD/HKD.
- Indices: Get exposure to groups of shares and trade on the price movements of popular indices such as the UK 100, or sector-specific indices such as the FANG Plus index.
- Cryptocurrencies: Trade on the price of cryptocurrencies against the US dollar. Popular cryptocurrencies include bitcoin, ethereum and bitcoin cash, while other altcoins include dash, NEO and stellar.
- Commodities: Take a position on the most popularly-traded commodity sectors, like energies (oil and natural gas), metals (gold, silver and copper) and soft commodities (cocoa, coffee and sugar).
- Treasuries: Get exposure to government gilts, bonds, bunds and treasury notes, such as the Eurodollar and US T-Bond.
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