What Is Spread Betting? How It Works in the UK (2026)
Spread betting is a leveraged derivative that lets you bet on whether a market’s price will rise or fall without owning the underlying asset, staked in £ per point. Profit or loss means the points the market moves multiplied by your stake per point, and the spread between the buy and sell price is the broker’s charge. The EUR/USD spread of Pepperstone and Capital.com was 0.6 points on 1 Aug 2026, the lowest of the 14 brokers we compare. Spread betting is regulated by the FCA and profits are tax free for most UK retail traders. Losses on a position exceed the initial deposit when the market moves far enough against you, and negative balance protection stops them exceeding the money in your account.
Spread betting lets you take a position on a market’s direction without owning the underlying asset.
How it works. You choose a market and decide whether to go long (buy) or short (sell). You stake a fixed amount per point of movement. Your profit or loss equals the points moved multiplied by your stake.
Leverage and risk. The FCA limits retail leverage to 30:1 on major currency pairs, which means a 3.33% margin. Brokers close positions at 50% of the margin required. Losses on a position exceed the initial deposit in a large enough move, and negative balance protection caps them at your account balance.
Tax and regulation. Spread betting is regulated by the FCA. For most UK retail traders, profits are tax free and carry no Capital Gains Tax or Stamp Duty.
What it costs. The spread between the buy and sell price is the broker’s charge. The nine-pair average spread across the 13 UK spread betting accounts in our 1 Aug 2026 data was 1.7 points.
What a point is. One point on EUR/USD is a move of 0.0001 in the quoted rate; one point on the FTSE 100 is 1 index point. A bet at £5 a point gains or loses £5 per point move.
What it is not. The difference between spread betting products is regulation: financial spread betting is FCA-regulated, while sports spread betting falls under the Gambling Commission.
Updated on 6 Sep 2026: Item five of the opening answer used to say one point on EUR/USD is 0.0001 of the price. A point is a move of 0.0001 in the quoted rate, not a fraction of the price, and the sentence now says so. No figure changed. Earlier: Updated on 5 Sep 2026: The opening answer now runs to six items, adding what a point is and the line between financial and sports spread betting. A table showing what one point is and the FCA leverage cap for twelve markets sits under the stake-per-point section, and the unverified share point was removed from the prose. No figure changed. Earlier: Updated on 3 Sep 2026: the page moved onto the site’s guide layout, with the how-it-works diagram beside the answer and two diagrams added, the margin held against a £5 per point FTSE 100 bet and the long and short worked examples side by side. No figure changed. Earlier, on 2 Sep 2026: the two links after the legal and gambling FAQ answers now sit inside the last sentence of each answer rather than on a line of their own, and the closing link to the platform ranking names it as the monthly ranking of all 14 FCA-regulated providers. Rebuilt on 2 Sep 2026 as the site’s concept page. The title and the heading now ask the question the page answers. The opening is a one-paragraph definition followed by a four-part summary of how it works, leverage and risk, tax and regulation, and cost, with every spread figure rendered from our 1 Aug 2026 data. The how-to-start, legal-and-tax and risk-management sections were cut to a sentence and a link, a link, and a definition, because the beginners guide, the tax guide and the stop-loss guide own those answers. Four FAQ entries replaced three. Earlier: rebuilt on 25 Aug 2026 as the site’s single spread betting guide, absorbing the separate advantages, risks and examples pages; updated on 26 Aug 2026 with the section separating financial spread betting from sports spread betting and from the American “point spread”.
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One quote, two prices. The gap between them is the spread, and it is the cost of the bet. Each point the market moves is worth your stake per point.
How Does Spread Betting Work?
What that spread costs at each provider is published each month as the August 2026 spread harvest, with one row per broker and the date each figure was read.
Stake Per Point
Your stake is what one point of movement is worth to you. At £5 per point on the FTSE 100, every one-point move in the index adds or removes £5, so a 20-point move is £100 either way. A point means different things in different markets: one index point on the FTSE 100, one pip on a currency pair. The market’s contract details on the platform state which.
What a point is worth depends on the market; the margin your stake ties up depends on the market’s FCA class, as the table below shows.
Market
One point is
FCA leverage cap
Minimum margin
GBP/USD
0.0001
30:1
3.33%
EUR/USD
0.0001
30:1
3.33%
EUR/GBP
0.0001
30:1
3.33%
USD/JPY
0.01
30:1
3.33%
AUD/USD
0.0001
20:1
5%
USD/CAD
0.0001
30:1
3.33%
AUD/JPY
0.01
20:1
5%
EUR/JPY
0.01
30:1
3.33%
USD/SGD
0.0001
20:1
5%
UK 100
1
20:1
5%
US 500
1
20:1
5%
Germany 40
1
20:1
5%
Point sizes are the site’s market definitions; the leverage caps are the FCA’s retail limits under PS19/18, as held in the calculator configuration.
Going Long And Going Short
Going long means buying at the higher of the two quoted prices, and you do it when you expect the market to rise. Going short means selling at the lower price, and you do it when you expect the market to fall. A short position profits as the price drops and loses as it climbs, so your direction decides which way the arithmetic runs. Betting on a fall needs no extra permission and no borrowed stock, which is the practical difference from selling shares you do not own.
The Spread
You start every position slightly behind: the market has to move by the spread before you break even. Across the brokers in our spread data, last updated on 1 Aug 2026 and refreshed monthly, the industry average spread on EUR/USD is 1 point. A £1 per point bet on that pair therefore opens about £1 down, before the market moves at all.
Margin And Leverage
Margin is the deposit your provider holds against the position while it is open, and leverage is the multiple that deposit controls. A £5 per point bet on the FTSE 100 at 10,851 carries a notional value of roughly £54,000. At the 20:1 cap that applies to major indices for retail clients, the provider asks for about £2,700 of that. Margin is not the most you can lose: it is the amount the position needs to stay open. Move far enough against the position and the provider asks for more margin, or closes it.
The same £5 per point bet as two bars. The long bar is the exposure, about £54,000; the short bar is the margin the provider holds at the 20:1 cap, about £2,700. A move against you is charged against the whole exposure, not the margin.
A Worked Spread Betting Example
Both examples below use the same quote on the FTSE 100: a sell price of 10,849 and a buy price of 10,851, a spread of 2 points. Levels follow the index’s close of 10,854 on 24 August 2026. Nothing here is a prediction of what the FTSE will do, only of what the arithmetic does when it moves.
Example 1: A Long Bet That Wins
You expect the index to rise during the session, so you buy at 10,851 with a stake of £5 per point. The market rallies and you close the bet at the sell price of 10,899.
Opening level (you buy at the offer)
10,851
Closing level (you sell at the bid)
10,899
Points gained
10,899 − 10,851 = 48 points
Stake
£5 per point
Profit
48 × £5 = £240
The 2-point spread is already inside that £240, because you bought at the higher price and sold at the lower one. Overnight funding would be charged on top if you held the bet past the daily close.
Example 2: A Short Bet That Loses
Take the same quote and the opposite view. You expect the index to fall, so you sell at 10,849 with a stake of £5 per point. Instead it rallies to 10,899 / 10,901, and you close the bet by buying at 10,901.
Opening level (you sell at the bid)
10,849
Closing level (you buy at the offer)
10,901
Points lost
10,901 − 10,849 = 52 points
Stake
£5 per point
Loss
52 × £5 = £260
The market made the same 50-point move in both examples, from a 10,849 / 10,851 quote to 10,899 / 10,901. The long made £240 and the short lost £260, and the 4-point gap between those results is the 2-point spread, charged once on each bet. A stop-loss set to close the short at 10,899 would have capped the loss at 50 points, £250, provided the market did not gap straight through the level.
The two worked examples side by side. The long makes 48 points and the short loses 52 on the same 50-point move, because each bet pays the 2-point spread once.
The calculator below runs the same arithmetic on your own stake and levels, including the margin the position would need. The full version, with more markets, lives on our spread betting calculator page.
Spread betting calculator
Cost, profit or loss, and margin on one bet
Direction
On GBP/USD one point is a 0.0001 move, so £5 per point is £5 per pip.
1.3521 is 13,521 points.
GBP/USD is quoted in index points: one point is a 1.0 move of the level, and the bet is priced per index point.
Opening level from the Fri 4 Sept 2026 5pm New York closeOpening level: your own figure, from your platform's deal ticketSpread: Pepperstone published, 1 Aug 2026Spread: your own figure
A buy at £5 per point that closes 80 points highermakes£400.00 before the spread. Pepperstone's published1.0-point spread costs £5.00 on this bet, leaving £395.00. The margin held to open it is £2,253.50.
Enter the level from your platform's deal ticket and your provider's spread in points; the ledger then prices the bet.
Profit or loss on the move80 points × £5.00 per point£400.00
Cost of the spread1.0 point × £5.00 per point, paid on entry− £5.00
Net result£395.00
Margin to open13,521 points × £5.00 = £67,605 notional, at the FCA 30:1major-pair cap£2,253.50
Spread betting profits are free of Capital Gains Tax and stamp duty for most UK residents; see how spread bets are taxed. Overnight funding is not included; see overnight funding in spread betting. Spreads are the brokers' own published averages, read on 1 Aug 2026, or your own figure where you type one; neither is a quote at the moment you deal. Margin uses the FCA COBS 22.5 retail leverage cap for the market class.
Spread betting’s appeal in the UK is the tax treatment and the freedom to trade in either direction. The costs are leverage risk, overnight funding and the spread itself.
Advantages
Disadvantages
Profits free of Capital Gains Tax for most UK retail traders
Losses can exceed the money you staked on the position
No Stamp Duty, which saves 0.5% against buying UK shares
Leverage magnifies a loss as fast as it magnifies a profit
Going short is as simple as going long
Overnight funding is charged on every night a bet is held
Stakes and profits stay in pounds on overseas markets
The spread is a cost on every bet, paid at the open
No separate commission, because the spread is the charge
Losses cannot be offset against tax, as gambling losses
How Do You Manage Spread Betting Risk?
Risk management on a spread bet comes down to two decisions, both taken before the position opens. How much is a point worth to you, and where does the bet close if you are wrong.
Leverage is what lets a small stake carry a large position. The same leverage works in reverse, so a position can lose more than the stake behind it.
A stop-loss closes the position for you. It sits at the level you set and closes the bet at the best available price once the market reaches it, which caps the loss without you watching the screen. A guaranteed stop-loss order goes further and closes at exactly your level even when the market gaps past it, for a premium the provider charges on top. Our stop-loss order guide covers both order types and what each one costs.
The industry numbers are worth reading plainly. Every FCA-regulated provider has to publish the share of its retail accounts that lose money, and across the 14 providers we compare that figure runs from 61% to 76.6%. Those are the customers of regulated firms using ordinary risk tools, not people doing anything exotic. Bear in mind that there is always a risk involved with spread betting, and only capital you can afford to lose belongs in the account.
What Can You Spread Bet On?
UK providers price spread bets on a range of markets spanning six main groups, and the same stake-per-point mechanics apply to all.
Forex. Currency pairs from majors like EUR/USD to crosses and exotics, priced in pips, and the market our monthly spread data tracks.
Indices. A whole market in one position, with the FTSE 100, the S&P 500 and the DAX 40 the most traded of them.
Shares. Individual companies, priced in pence per point on UK stocks, without the Stamp Duty a purchase would attract.
Commodities. Gold, silver, oil and the softs, traded on price without any question of storage or delivery.
Bonds. Government debt such as UK gilts and the German bund.
Options. A position on an option’s premium rather than the underlying market, offered by a minority of providers.
Crypto is the notable exclusion: the FCA banned the sale of crypto derivatives, including spread bets, to retail clients from 6 January 2021. Our spread betting markets page lists what each group covers in detail.
Financial Spread Betting, Sports Spread Betting And The American “Point Spread”
Sports spread betting is a gambling product licensed by the Gambling Commission, not the FCA. Spread Bet UK covers financial spread betting only and does not review sports spread betting firms. The only difference between spread betting types is regulation, tax treatment and the markets involved; they share a name and a per-point pricing idea.
The American “point spread” is different again: a handicap applied to a team at fixed odds, where the stake and the return are both known before the event, which is not spread betting in the British sense at all.
Once you know how the product works, the monthly ranking of all 14 FCA-regulated providers, the best spread betting platform UK list, shows which of them price it tightest.
Spread Betting FAQs
How does spread betting work?
Spread betting works by staking a fixed £ per point on whether a market’s price will rise or fall. Your profit or loss is the number of points the market moves multiplied by your stake, and the spread between the buy and sell price is your cost.
What does spread betting mean?
The “spread” is the gap between the broker’s buy and sell price. “Betting” refers to staking per point of movement rather than buying the asset.
How risky is spread betting?
Risky enough that most people lose. Every FCA-authorised firm has to publish the share of its own retail clients who lose money, and across the brokers we rank that figure runs from 61% to 76.6% of retail investor accounts. That number counts accounts that ended in loss. It says nothing about how much was lost or how long anyone traded, so read it as a floor on the risk rather than a description of it. Leverage is what makes a loss arrive faster than the market does, because your balance moves by the full size of the market move and not by the size of your stake. Negative balance protection caps the loss at the money in your account; it does not prevent one (see how spread betting is regulated).
Is spread betting gambling?
HMRC taxes spread betting profits as betting winnings for most retail traders. The FCA regulates it as a financial product (see spread betting and gambling compared).
Can You Lose More Than Your Deposit?
A losing position can move further against you than the money you staked on it, so yes, a spread bet can cost more than the stake. FCA rules require negative balance protection on retail spread betting accounts, which means your loss stops at the money in the account and you cannot end up owing the provider. Professional clients give up that protection when they change status.
How Long Can A Spread Bet Stay Open?
A daily funded bet has no expiry date and stays open until you close it, with an overnight funding charge applied for every night you hold it. A quarterly or futures bet expires on a set date, carries a wider spread and has the financing built into the price instead. The choice is a cost decision: daily bets suit short holds, expiry-dated bets suit longer ones.
Spread Betting At A Glance
Every line below is stated in full somewhere above; this is the summary to keep.
Instrument type
Leveraged derivative: a bet on price movement, with no ownership of the asset
Regulator
Financial Conduct Authority (FCA)
Tax status
Free of Capital Gains Tax and Stamp Duty for most UK retail traders
How you stake
Pounds per point of movement, from £0.01 per point at the cheapest providers
Maximum leverage
30:1 on major currency pairs for retail clients
Markets available
Forex, indices, shares, commodities, bonds and options
Risk controls
Stop-loss and guaranteed stop-loss orders, plus negative balance protection
According to Spread Bet UK’s guide to what spread betting is, updated August 2026, spread bets are staked in pounds per point and are free of Capital Gains Tax for most UK retail traders.
Justin Grossbard co-founded Spread-Bet.co.uk with Noam Korbl in 2024, and co-founded the broker comparison network CompareForexBrokers with him in 2014. He has been investing since 1998 and actively trading since 2014, and has written on forex and CFD trading for Kiplinger, Entrepreneur, Finance Magnates and MoneyShow since 2019.
