We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies. You can view our cookie policy and edit your settings here, or by following the link at the bottom of any page on our site.
Spread betting is a leveraged financial derivative. When spread betting, you are making a bet on the direction in which a market will move. The accuracy of your bet determines the profit or loss when the position is closed.
Spread betting definition
Spread betting is a leveraged financial derivative. When spread betting, you are making a bet on the direction in which a market will move. The accuracy of your bet determines the profit or loss when the position is closed.
When opening a spread betting position, you decide how much you would like to bet for each point of movement in an asset. Buy positions return a profit if the market increases in price, sell positions return a profit if it drops in price. The profit or loss at the close of the trade is calculated as:
Profit or loss = (£ bet per point x points moved) - charges to open and maintain position
Spread betting is a leveraged product, meaning you only need to put down a fraction of the full value of the trade in order to open a position. The margin required depends on the market being traded and size of the bet.
The spread
All spread bets include a spread that wraps around the price of the underlying market. Buy prices are always slightly higher than the market price, sell prices slightly lower. The cost of opening a trade is reflected in the spread.
Investing news
Visit our investing news section for the latest news and analysis, and where potential investment opportunities may lie.
The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA, a SIPP or an IG Smart Portfolio can fall as well as rise, which could mean getting back less than you originally put in. Spread bets and CFDs are leveraged products and can result in losses that exceed deposits. Spread betting and CFD trading are not permitted within the IG SIPP. Please ensure you fully understand the risks and take care to manage your exposure.
iShares® and BlackRock® are registered trademarks of BlackRock, Inc. and its affiliates (“BlackRock”) and are used under license. Further, BlackRock, Inc. and its affiliates including, but not limited to, BlackRock Investment Management (UK) Limited, are not affiliated with IG Markets Limited and its affiliates. Accordingly, BlackRock makes no representations or warranties regarding the advisability of investing in any product or service offered by IG Markets Limited or any of its affiliates. BlackRock has no obligation or liability in connection with the operation, marketing, trading or sale of any product or service offered by IG Markets Limited or any of its affiliates.
