- 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.
Try spread betting with a demo account >>
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 |
Practice spread betting now >>
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.
Disclaimer Past performance is not a reliable indicator of future results.
CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.
CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.
*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.
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