What is spread betting and how does it work?

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When you spread bet, you spread betting trading account a position based on whether you expect the price of an instrument to rise or fall in value. You will make a profit or loss based on whether or not the market moves in your chosen direction. With spread betting, you don't buy or sell the underlying asset for example a physical share or commodity.

Instead you place a bet based on whether you expect the price of a product to go up or down in value. If you expect the value of a spread betting trading account or commodity to rise, you would open a long position buy.

Conversely, if you expect the share or commodity to fall in value, you would take a short position sell. This is known as your spread bet 'stake' size. This means that for every point that the price of the instrument moves in your favour, you will gain multiples of your stake times the number of spread betting trading account by which the instrument price has moved in your favour. On the other hand, you will lose multiples of your stake for every point the price moves against you.

Please note that with spread betting, losses can exceed deposits. See our spread betting examples for more on how to spread bet. The difference between the buy price and sell price is referred to as the spread.

As one spread betting trading account the leading providers of spread betting in the UK, we offer consistently competitive spreads. Spread betting is a leveraged product, which means you only need to deposit a small percentage of the full value of the spread bet in order to open a position also called 'trading on margin'. While margined or leveraged trading allows you to magnify your returns, losses will also be magnified as they are based on the full spread betting trading account of the position and you could lose more than your deposit.

Learn more about margined trading. Many investors choose to spread bet on the financial markets as spread betting offers a number of benefits over buying physical shares:. Sign up for a risk-free demo account or a live account now. Losses can exceed your deposits on a live account. It's a good idea to keep up to date with current affairs spread betting trading account news because real-world events often influence market prices. To take a historic example, let's look at the Help to Buy housing scheme announced by the UK government a while ago.

Many believed that this scheme would boost UK homebuilders' profitability. In this example the spread is 1. For every point that Barratts' share price moved up or down, you would have netted a profit or loss multiplied by your stake amount. You decide to close your buy bet by selling at the current sell price.

The price has moved 90 points sell price — initial buy price in your favour. The price has moved 50 points - against you. See our detailed spread betting examples. You feel that the price is likely to continue dropping, so to limit your losses you decide to sell at the current sell price to close the bet.

Learn more spread betting trading account spread betting with us, or if you're ready to trade, open a live account now. Losses can exceed deposits. Past performance is not indicative of future performance. Our prices may not be identical to prices for similar financial instruments in spread betting trading account underlying market. This website spread betting trading account cookies. By continuing to use this website you agree to this.

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How can I reset my password? How do I place a trade? Do you offer a demo account? Open a demo CFD account. Home Learn Learn spread betting What is spread betting? What is spread betting? Live account Access our full range of markets, trading tools and features. Open a live account. Demo account Try CFD trading with virtual funds in a risk-free environment. Open a demo account. Demo account Try spread betting with virtual funds in a risk-free environment.

Sign up for free. Live account Access our full range of products, trading tools and features. Open a live account Losses can exceed your deposits. Spread betting and CFD trading can spread betting trading account in losses that exceed your deposits. Ensure you understand the risks.

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