Spread betting on shares means staking pounds per point on a company’s share price; the share is never bought, so you do not own it. The FCA caps retail leverage on individual shares at 5:1, so a £1,000 position needs £200 of margin. Buying UK-listed shares outright carries 0.5% Stamp Duty Reserve Tax; a spread bet buys no share, so none arises. Profits sit outside Capital Gains Tax for most UK retail traders.
To place the bet, you stake an amount per point, and for every point the market moves in your favour, you’ll make a profit. Equally, for every point the market goes against you, you will make a loss. For example, if you bet on the price of Vodafone rising at £1 (your stake size) per point, for every 1p Vodafone rises, you’ll earn £1.
Staking an amount per point and settling on the points moved is what spread betting is, and our guide shows the same arithmetic on any market.
Our own reading of what the market costs to enter is published each month as the September 2026 spread read, with one row per broker and the date each figure was read.
How Does Spread Betting vs Share Dealing Differ?
Spread betting vs share dealing differs in four ways. A spread bet buys no share, goes short as simply as long, runs on margin, and sits outside Capital Gains Tax for most UK retail traders. The table below sets the two side by side.
Pros and Cons
| Features | Spread Betting | Trading Shares |
|---|---|---|
| Asset Ownership | No | Yes |
| Profit From the Direction of the Market | Rising (long) & falling (short) markets | Both directions; shorting requires borrowing shares |
| Trading Fees | Spread and rollover fees (nightly interest charges for leveraged positions) | Spread + commission, which depends on the provider. No overnight funding charge |
| Tax | No Capital Gains Tax for most UK retail traders. No stamp duty, as no share is bought | Capital Gains Tax on gains above £3,000, share losses allowable Dividend tax above the annual allowance, neither applies in an ISA Stamp duty at 0.5% on UK company shares |
| Leverage/Margin Trading | Yes | No |
| Regulated | Yes, FCA | Yes, FCA |
A spread bet on a foreign share such as Apple or BMW is staked in pounds per point.
How To Manage Risk When Spread Betting Shares?
There are many methods to manage risk when spread betting shares, so it is a good idea to develop your own risk management strategy.
Stop Loss Orders
A stop loss is a separate pending order that automatically executes and closes your bet at a set price if the market moves against you too much.
Guaranteed Stop Loss Orders
A guaranteed stop-loss order (GSLO) closes your position at the price you set even when the market gaps through it. The premium is charged in different ways. IG charges it only where the stop is triggered, and CMC Markets charges it when the order is placed and refunds it in full where the stop is never triggered. Of the 14 brokers we rank, Pepperstone, ActivTrades, FXCM, Vantage and FxPro offer no guaranteed stop.
What Costs Does Shares Spread Betting Have?
The costs of a share spread bet are the spread, overnight funding and a guaranteed stop premium where you choose to use one. The spread is the difference between the buy and sell price, and there is no separate dealing commission. Overnight funding is a fee for holding a position past 10pm UK time.
Commission
One advantage of share spread betting is the low trading costs, as you do not pay commissions when executing your bets.
What Happens To A Share Spread Bet When A Dividend Is Paid?
At Spreadex, a share spread bet held through the cash market’s close on the day before the ex-date gets a cash adjustment that evening. The adjustment is credited to a long bet and debited from a short one, as Spreadex’s UK shares FAQ states, read .
The share price falls by roughly the dividend paid, so the adjustment offsets that fall on a long bet. Spreadex states that withholding tax on a dividend is a charge passed on, not levied by it.
- Long spread bet: adjustment credited to your account
- Short spread bet: adjustment debited from your account
Taxes
For most UK retail traders, spread betting profits sit outside Capital Gains Tax. HMRC’s Capital Gains Manual CG56105 confirms no chargeable gains or allowable losses arise, so losses cannot be set against other gains. A share investor pays Capital Gains Tax on gains above the £3,000 annual exempt amount for 2026/27, at 18% within the basic band or 24% above it. A spread bet buys no share, so the 0.5% stamp duty on buying shares in UK companies never arises. Tax treatment depends on your individual circumstances and can change, so you should seek professional tax advice if you’re unsure.
The comparison below applies the 2026/27 figures to a profit of your own.
Spread bet or CFD: what you keep after tax
Capital Gains Tax on the same profit, 2026/27 rates
HMRC 2026/27: £3,000 annual exempt amount, CGT 18% basic and 24% higher
On a £5,000 winning trade, a spread bettor keeps £5,000. A basic-rate CFD trader with the £3,000 exemption unused pays £360 CGT and keeps £4,640; the difference is £360.
Spread bet
CFD
Reverse the trade and the ranking reverses. Under HMRC CG56105 no allowable losses arise from spread betting, so a spread betting loss cannot be set against other gains. Under HMRC CG56100 a CFD closed at a loss produces an allowable loss, which can be set against other chargeable gains. Tax treatment depends on your circumstances and can change; this applies the published 2026/27 figures and is not advice.
The £3,000 annual exempt amount is a whole-year allowance, not a per-trade one. The comparison assumes the whole gain falls inside the chosen tax band. HMRC CG56100 says all debits and credits to a CFD account, including commission and sums equivalent to interest, are brought into the CFD's gain or loss, so the tool shows the CFD's tax before those costs. Rates and allowance: HMRC, 2026/27. HMRC's Capital Gains Manual (CG56105) states that no chargeable gains or allowable losses arise from spread betting. For most UK retail traders, profits are therefore free of Capital Gains Tax. Tax treatment depends on individual circumstances and can change. See the tax treatment of spread bets.
Can You Use Margin To Increase Exposure?
The margin is the money you must put up to open a leveraged spread bet, and it is a fraction of the position’s full value, as how margin works on a spread bet explains. The FCA requires a firm to close a retail client’s positions when net equity falls below 50% of the margin requirement under COBS 22.5.13R (read ).
Examples Of Spread Betting With Shares
Spread Betting Shares Example: Going Long
Let’s say you think BT Group plc (BT) will rise over the next few days, and you want to go long on the share price. You open a spread bet on BT at 110p with a stake of £10 per point.
The next day, BT opens positively at 120p per share, rising 10p (or 10-points), making you a healthy profit of £100 (10 points x £10 stake per point).
However, if BT opened negatively to 100p, you’d lose £100 (10 point fall x £10 stake per point).
Spread Betting Shares Example: Going Short
In this scenario, you believe that Tesco’s share price will fall based on your technical analysis. To take advantage of this, you open a spread bet on Tesco at 250p with a stake of £1 per point.
A week has passed, and the share price of Tesco fell from 250p to 230p, so you decide to close, making a £20 profit (20 points x £1 stake per point).
The same bet would have lost £30 had Tesco risen from 250p to 280p (30-point move x £1 stake per point).
What Shares Can You Spread Bet on?
You can bet on the price movements of individual shares worldwide, where a spread betting company offers popular stock markets from the UK, US, EU, and Asian markets. These include shares such as Vodafone, Apple, Amazon, and BMW.
Not every spread betting firm offers shares. FxPro’s spread betting covers 4 asset classes (forex, spot indices, spot metals and spot energy) and no shares, although it sells share CFDs. On the spread betting side, Pepperstone publishes 1,100+ shares and Spread Co around 1,000.
Share Options
A call option gains when the price rises and a put when it falls. With options spread betting, only a bought option limits your risk to the premium paid. A sold option does not.
ETFs (Exchange Traded Funds)
Some brokers also offer popular ETFs to spread bet, allowing you to bet on professional funds that develop strategies to track indices, commodities, or a basket of assets.
The ETF ranges for spread betting are CMC Markets 5,000+, Spreadex over 200 and Pepperstone 90+.
FAQ
Which Is Cheaper, Spread Betting Or Share Dealing?
Neither is cheaper outright. A share spread bet pays no commission. A position held overnight pays overnight funding. Share dealing commission depends on the provider, and dealing has no overnight charge. Buying UK company shares costs 0.5% in Stamp Duty Reserve Tax, and a spread bet pays none. Tax treatment depends on your individual circumstances.
Can A Share Spread Bet Lose More Than Your Margin?
Yes, a share spread bet loses the stake per point times the full price move. A large enough move against it takes more than the margin put up for it. For a retail client the FCA limits the loss to the funds in the account under COBS 22.5.17R. Professional clients sit outside that protection. See how the guide answers losing more than your deposit for the general rule.
Once the price reaches a level you set, a stop-loss on your spread bet closes the losing bet, limiting how much of your account one bet takes. When the market gaps, a normal stop fills at the next available price, and only a guaranteed stop fills at the level set.
Is Spread Betting Gambling?
The FCA regulates a spread bet as a specified investment under article 85 of the Regulated Activities Order. HMRC’s Business Income Manual BIM22015 says betting and gambling, as such, do not constitute trading. See whether spread betting counts as gambling for the full position.
Which Is Better For Shares, CFDs Or Spread Betting?
A CFD sits inside Capital Gains Tax both ways, with profits taxed and losses allowable against gains under CG56100. A spread bet sits outside it both ways under CG56105, for most UK retail traders. Tax treatment depends on your individual circumstances and is subject to change. See spread bets and CFDs compared for the differences in full.
How Do You Choose A Spread Betting Broker?
For shares, first check the firm offers share spread bets at all, as FxPro offers none. Read its published share spread next. Check whether it offers guaranteed stops, as some ranked firms offer none. Compare the ranked spread betting brokers side by side.
Reader Questions
What happens if a company goes bankrupt while I’m spread betting on their shares?
If a company goes bankrupt, your position could be closed at a significant loss if you’re on the wrong side of the trade.
What makes spread betting cheaper than traditional share dealing when it comes to taxes and fees?
Spread betting isn’t taxed (except in exceptional circumstances), shares are taxed.