Spread Betting is a form of derivative trading that allows you to speculate on the price movement of financial markets such as Forex, Indices and Commodities by choosing a buy or sell position. These trades allow you to take advantage on whether the price of your chosen market will rise or fall without needing to invest in the underlying asset. You simply enter the amount you wish to trade “per point” and your profit or loss will move in these increments for each point movement in the market.
Spread Betting is a leveraged product. Leveraged trading allows you to put only a small upfront investment in order to open a much larger position. Trading using leverage means that there are significant benefits and risks: your investment capital can go further, but you could lose your entire investment if the trade goes against you, if you are a Retail Client. Professional clients can lose more than their deposits and they may be required to deposit additional funds to cover their losses. It is therefore important to understand the risks involved and have suitable risk management strategies in place.
Spread Betting allows you the flexibility and ability to buy (go long) as well as sell (go short), depending on your view of the market. You are also able to Hedge positions in both directions at the same time. Further, in the UK, Spread Betting is free from tax*. Any profits made will be exempt from Capital Gains Tax and Stamp Duty*. Conversely, losses cannot be used to offset an individual’s tax liabilities*.
Spread Bet example:
UK 100 is currently trading in the underlying market at 7,098 (Bid Price) - 7,100 (Offer Price).
You buy £1 UK 100 @ 7,100.
UK 100 is then trading at 7,105 - 7,107.
You close your position @ 7,105.
7,105-7,100 = 5 points. 5 x £1 bet = £5.00 profit.
Spread Bet with Capital Index
As a Capital Index client, you can take Spread Bets on a variety of markets using a leverage of up to 30:1 depending on the product you trade, with a fast and reliable execution.
For a complete list of tradable instruments please visit our Product Specifications.
*Spread Betting is exempt from UK Stamp Duty and Capital Gains Tax. Tax laws are subject to change and depend on your individual circumstances. Tax law may differ in a jurisdiction other than the UK. Please seek independent advice if necessary.