How to spread bet
Spread betting enables you to speculate on the future movement of market prices, whether the asset rises or falls in value. Learn how to spread bet in six steps – covering everything from opening an account to making your first trade.
Interested in spread betting with IG?
Six steps to placing a spread bet
- Learn how to spread bet
- Create and fund an account
- Build a trading plan
- Find an opportunity
- Choose your spread betting platform
- Open, monitor and close your first position
Learn how to spread bet
When you spread bet, you are speculating on the future direction of a market’s price. If you expect an asset’s price to rise, you’d open a position to ‘buy’ and if you expect an asset’s price to fall, you’d opt to ‘sell’.
Take a look at some specific examples, including:
- How to spread bet stocks
- How to spread bet forex
- How to spread bet cryptocurrencies
- How to spread bet indices
- How to spread bet commodities
Or read our one-page guide: what is spread betting and how does it work?
Create and fund an account
Creating an IG spread betting account is a straightforward process, and usually takes only a few minutes to complete.
Once we've verified your identity and opened your account, you'll need to deposit some funds before you can deal. You can do this using your credit or debit card, or via bank transfer.
If you'd rather take some time getting to know our platform and apps without risking any real money, you can open a demo account which gives you £10,000 in virtual funds to practise with.
Build a trading plan
Building a trading plan is particularly important if you’re new to the markets. A trading plan should include your motivation, time commitment, goals, attitude to risk, available capital, markets to trade and preferred strategies.
The aim of a trading plan is to take the emotion out of your decision making, as well as providing some structure for when you open and close your positions.
Find an opportunity
Once you're logged in to our platform or app, you can browse or search over 16,000 markets, including:
Discover the benefits of spread betting.
Of course, with so many markets to choose from, it can be difficult to know where to start. That's why we offer a range of tools and resources to help you analyse markets and identify opportunities:
- Our free essential charts give you a variety of tools for analysing market movements, with advanced options available
- Our ProRealTime charting package enables you to gain access to automated dealing, as well as a range of indicators. It’s free to use if you transact at least four times in a given month, otherwise there’s a £30 per month fee
- Our team of experts provide up-to-the minute analysis of what's happening in the markets, including live video streams
- Our range of alerts will keep you in touch with what's going on in the markets and help you to identify trends worth watching
- Our economic calendar provides a full schedule of macroeconomic events and company announcements, showing previous, estimated and actual data
- With our market screener, you can narrow down our list of share markets according to company fundamentals, location, index and industry sector
- Our signals highlight potential deals by alerting you to significant trends or patterns, as identified by Autochartist technology and PIA-First analysts
- Our market data pages provide a huge range of insights including the day's most traded markets, biggest movers, current client sentiment and recent activity
Learn more about our trading platforms and their features
Choose your spread betting platform
With IG, you’ll have access to several trading platforms including:
- Our web-based platform
- Mobile trading apps
- MetaTrader 4
- Advanced platforms
These can all be tailored to suit your trading style and preferences, with personalised alerts, interactive charts and risk management tools.
Find out more about our trading platforms
Open, monitor and close your first position
Once you have chosen your platform, you can start spread betting. Just open the deal ticket for your chosen market, and you’ll see both a buy and a sell price listed. The costs of any given trade are factored into these two prices, so you’ll always buy slightly higher than the market price and sell slightly below it.
To open a position, you’ll also need to choose the size of your position. In spread betting, this is called your bet size, and is the amount that you’re betting per point of movement in the underlying market.
Finally, before you enter the market, it is important to consider how you will manage your risk. Attaching stops or limits to your position will instruct us to close your trade once it hits a certain level – a stop-loss order can minimise your potential loss, while a limit order can help lock in any profits.
Once you’re ready, it’s time to hit buy to open a long position or sell to open a short position. You can then monitor the profit/loss of your position in the ‘open positions’ section of the dealing platform.
When you decide it’s time to close your position, you just place an identically sized trade in the opposite direction to the one you opened earlier. On our web platform and apps, this can also be done by clicking ‘close’ on an open position.
Spread betting examples and calculator
Whether you’re interested in forex, cryptocurrencies, shares, indices, or one of the many other markets on offer, it’s important to understand how to work out the capital at risk. For spread betting, the calculation for this is:
Capital at risk = bet size x market price (in points)
When you spread bet, the market price will be displayed in points. So, for example, if you were trading a forex pair, instead of a price of ‘1.12980’ you would see a price of ‘11298.0’. If you’d opened a trade worth £10 per point of movement, your total capital at risk would then be 11298.0 x 10 = £112,980. You can reduce this risk by adding stops to your position.
As spread betting is a leveraged product, you will only need to cover the margin as opposed to the full value of the trade. The spread betting calculation for margin is:
Margin = margin factor x total exposure.
For the above example, if the margin factor was 3.33%, you would only have to put down £3762.23 (3.33% x £112,980) to open the trade. Leverage magnifies your exposure because your profit/loss will be calculated according to the full size of your trade – in this case, £112,980.
How to spread bet on shares example
You decide to spread bet on shares and open a position on Barclays stock, which is currently trading at 150.25. If there was a one-point spread, you would be presented with a buy price of 150.75 and a sell price of 149.75.
You decide to open a long spread bet position on Barclays, buying at £10 per point of movement at 150.75. If Barclays shares had a margin requirement of 20%, you’d need to deposit £301.50 (£10 x 150.75 x 20%).
If your shares spread bet was correct
Let’s say Barclays shares increased to 170.75, you might decide to close your position to take your profit.
To close the spread bet position, you would reverse your trade by selling the shares for £10 a point at the new sell price of 170.25. As the market has moved in your favour by 19.5 points (170.25 - 150.75), your profit would be £195 (19.5 x £10).
With spread betting, you won’t have to pay any tax on your profits, or commission to open the position. However, you will have to pay funding charges if you keep your position open overnight.
If your shares spread bet was incorrect
However, let’s say shares of Barclays fell instead, down to 130.25. To close your position, you would opt to sell the shares back for £10 a point at the new sell price of 129.75.
As the market has moved against you by 21 points (129.75 - 150.75), you’d be looking at a loss of £210 (210 x £10), plus any additional funding charges.
Discover the differences between spread betting and share dealing.
How to spread bet on forex example
You decide to spread bet on forex, so open a position on EUR/USD, which is trading at £1.19129. As spread betting markets are listed in points, when you enter the platform you would see a market price of 11912.9. And, because of the spread, you would see a sell price of 11912.6 and a buy price of 11913.2.
You think that the dollar is going to rise against the euro, so you decide to sell £15 per point at 11912.6 – giving you a short position on the euro. EUR/USD has a margin factor of 3.33%, so you’d need to deposit £5950.35 (£15 x 11912.6 x 3.33%).
If your forex spread bet was correct
Let’s say EUR/USD fell to 11890.1, with a buy price of 11890.4 and a sell price of 11889.8. As you’re ready to secure your profit, you would opt to close your trade and buy the currency pair for £15 per point at 11890.4.
The market has moved by 22.2 points (11912.6 - 11890.4), which you multiply by £15 per point to get your total profit of £333 (£15 x 22.2). Remember, if you’d kept this position open overnight then your total profit would be lower because of funding charges.
If your forex spread bet was incorrect
However, let’s say EUR/USD rises instead. So, you decide to cut your losses when the market hits 11935.7 by buying the currency pair for £15 per point at the new buy price of 11936.0.
As the price has moved against you by 23.4 points (11912.6 - 11936.0), you would have made a loss of £351 (£15 x 23.4), plus any funding charges.
How to spread bet on a cryptocurrency example
You’re interested in spread betting on bitcoin and decide to open a long position against the US dollar (bitcoin/USD). The current market price is 3890, with a buy price of 3910 and a sell price of 3870.
As you believe that bitcoin is going to increase in value, you decide to buy at £20 per point. As bitcoin has a margin factor of 50%, you’d need to deposit £39,100 (£20 per point x 3910 x 50%).
If your cryptocurrency spread bet was correct
Let’s say that the price of bitcoin rises against the US dollar to 4040. At this point you decide to close your position and realise your profit. You would do so by reversing your trade – selling the bitcoin back for £20 per point at the new sell price of 4020 (slightly lower than the market price due to the spread).
The market has moved 110 points (4020 - 3910) in your favour, so you would take a profit of £2200 (£20 x 110), minus any funding charges.
If your cryptocurrency spread bet was incorrect
Let’s say that the market falls to 3770 instead, so you decide to close your position to prevent further losses – selling the bitcoin for £20 per point at the new buy price of 3790.
As the market has moved 120 points (3790 - 3910) against you, you would have lost £2400 (£20 x 120), plus any funding charges you have incurred.
How to spread bet on indices example
You want to spread bet on indices and decide to open a position on the FTSE 100, which has an underlying market value of 7114. With a one-point spread applied by IG, you can sell it at 7113.5 or buy at 7114.5.
As you anticipate that the FTSE 100 is set to rise, so you buy £10 per point at 7114.5. The FTSE 100 has a margin factor of 5%, you’d only need to deposit £3557.30 (£10 x 7114.5 x 5%).
If your indices spread bet was correct
Let’s say your prediction is correct and the FTSE 100 increases in value. So, you opt to reverse your trade and close your position when the market reaches 7150 – with a buy price of 7150.5 and a sell price of 7149.5.
You sell your £10 stake at a price of 7149.5. As the market moved in you favour by 35 points (7149.5 – 7114.5), your profit would be calculated by multiplying this figure by the amount you’ve bet per point. This gives you a profit of £350 (£10 x 35) minus any funding costs.
If your indices spread bet was incorrect
However, let’s say the FTSE declined in price, instead of rallying. So, you decide to cut your losses and reverse your trade, selling your £10 stake when it hits 7078 – with a buy price of 7078.5 and a sell price of 7077.5.
You’re closing your trade, so you sell at 7077.5, meaning the FTSE 100 has moved against you by 37 points (7077.5 - 7114.5). This gives you a loss of £370 (£10 x 37), plus any overnight funding charges if the position was open for more than one day.
How to spread bet on commodities example
You decide to spread bet on gold, which is currently trading at 1315.70, with a buy price of 1316.00 and a sell price of 1315.40. As you believe the price of gold is due to decline, you open a spread bet to sell the commodity for £30 per point of movement.
Gold has a margin factor of 5%, so you would need to put down £1973.10 (£30 x 1315.40 x 5%) to open the position.
If your commodities spread bet was correct
Let’s say the price of gold did fall, down to a new price of 1300.10. You decide to reverse your trade and opt to ‘close’ your position. You reverse your position by placing a trade for £30 per point at the new buy price of 1300.40.
As the market has moved in your favour by 15 points (1315.40 - 1300.40), you would be taking a profit of £450 (15 x £30). If you had kept your position open overnight, you would also have funding charges to pay.
If your commodities spread bet was incorrect
However, if you were incorrect and the market price of gold rose instead, to 1335.70, you would have made a loss. To close your position, you buy gold for £30 per point at the new buy price of 1335.40.
As the market has moved against you by 20 points (1315.40 - 1335.40), your total loss for the commodity spread bet would be £600 (20 x £30), plus any funding charges.
Develop your spread betting knowledge with IG
Find out more about spread betting and test yourself with IG Academy’s range of online courses.