How to spread bet

Six steps to placing a spread bet

Step 1: Learn how to spread bet

Spread betting is a way to speculate 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'.

When you spread bet, you'll be putting up a certain amount of capital per point of movement in the underlying market. Your profit and loss would then be multiplied by this amount to get your final sum.

For example, you thought a stock was going to increase in price so you opened a spread bet for £10 per point. If the stock increases in price by 10 points, you'd have made £100 (10 x £10), but if it decreased by 5 points, you'd lose £50 (5 x £10).

Spread betting is also leveraged, which means you'll only need to put down a small initial deposit to open a trade. Your end total is then calculated using your full exposure — meaning your profits and losses could be magnified.

Step 2: Create and fund an account

Open a live account via our online form — you could be ready to trade in minutes, and there's no obligation to add funds until you want to place a trade. Alternatively, you can practise trading first in our risk-free demo account.

Step 3: Build a trading plan

A trading plan outlines your motivation, time commitment, goals, attitude to risk, available capital, markets to trade and preferred strategies. Creating one is particularly important if you're new to the markets, as it can help you take the emotion out of your decision making and provide structure for when you open and close your positions.

Step 4: Find an opportunity

Once you're logged in to our platform or app, you can choose from 15,000+ markets, including forex, indices, shares and commodities.

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:

• Expert analysis — get technical and fundamental analysis straight from our in-house team
• Trading alerts — keep your finger on the pulse with unique price and economic data alerts
• Trading signals — get actionable 'buy' and 'sell' suggestions based on analysis
• Technical indicators — discover price trends using popular indicators such as MACD and Bollinger Bands
• Economic calendar — see a full schedule of macroeconomic events and company announcements
• Market screener — narrow down your choice of share by fundamentals, location, index and industry sector
• Market data — access unique insights including the day's recent activity and client sentiment

Step 5: Choose your spread betting platform

Start spread betting on our award-winning suite of platforms, including our web-based platform, mobile trading apps, MetaTrader 4 and advanced platforms. These can all be tailored to suit your trading style and preferences, with personalised alerts, interactive charts and risk management tools.

Step 6: Open, monitor and close your first position

When you open your platform, you'll be able to search for a market in the top left corner or browse through each asset class. After you've opened the deal ticket for your chosen market, you'll need to choose whether to buy or sell — depending on whether you think the asset will rise or fall in price. You'll also need to decide on your bet size, which will determine the margin you pay.

Before you enter the market, it's important to consider how you'll manage your risk. Attaching stops or limits to your position will automatically close your trade once it hits a certain level — a stop-loss order can minimise your potential loss, while a limit-close order can help lock in any profits.

Once you're ready, it's time to open your trade. You can then monitor the profit or loss of your position in the 'open positions' section of the dealing platform. When you decide it's time to close your position, just click 'close' to realise your profit or loss.

Spread betting examples and calculator

Whichever market you're interested in, it's important to understand how much capital you're putting at risk. For spread betting, the calculation is:

Capital at risk = bet size x market price (in points)

When you spread bet, the market price is displayed in points. For example, if you were trading a forex pair, instead of a price of '1.34000' you would see a price of '13400.0'. A trade worth £10 per point of movement would mean you're putting a total of £134,000 at risk (13400.0 x £10).

As spread betting is a leveraged product, you will only need to cover the margin as opposed to the full value of the trade:

Margin = margin factor x total exposure

For the above example, if the margin factor was 3.33%, you would only have to put down £4,462.20 (3.33% x £134,000) to open the trade. Leverage could potentially magnify your profit and loss, as they're calculated using the full size of your trade — in this case, £134,000 — not just the margin.

How to spread bet on shares example

You decide to spread bet on Barclays stock, which is currently trading at 285.50. If there was a one-point spread, you would be presented with a buy price of 286.00 and a sell price of 285.00.

You open a long spread bet position on Barclays, buying at £10 per point of movement at 286.00. If Barclays shares had a margin requirement of 20%, you'd need to deposit £572.00 (£10 x 286.00 x 20%).

If your shares spread bet was correct

Let's say Barclays shares increased to 306.00 — you might decide to close your position to take your profit. You'd close the spread bet at the new sell price of 305.50. As the market has moved in your favour by 19.5 points (305.50 - 286.00), your profit would be £195 (19.5 x £10). You won't pay any tax on your profits. However, you would have to pay funding charges to keep your position open overnight.

If your shares spread bet was incorrect

However, let's say shares of Barclays fell instead, down to 265.00, giving a new sell price of 264.50. As the market has moved against you by 21.5 points (264.50 - 286.00), you'd be looking at a loss of £215 (21.5 x £10), plus any additional funding charges.

How to spread bet on forex example

You decide to spread bet on EUR/USD, which is currently trading at 1.13500. You think that the dollar is going to rise against the euro, so you decide to sell the currency pair.

As spread betting markets are listed in points, when you enter the platform you would see a market price of 11350.0. Because of the spread, you would see a sell price of 11349.7 and a buy price of 11350.3.

You open the trade for £15 per point at 11349.7 and, as EUR/USD has a margin factor of 3.33%, you'd need to deposit £5,672.08 (£15 x 11349.7 x 3.33%).

If your forex spread bet was correct

Say EUR/USD fell to 11327.5, with a buy price of 11327.8 and a sell price of 11327.2. As the market has moved by 21.9 points (11349.7 - 11327.8), you'd have a total profit of £328.50 (£15 x 21.9). 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. You'd close your position at the new buy price of 11373.5. As the price has moved against you by 23.8 points (11349.7 - 11373.5), you would have made a loss of £357 (£15 x 23.8), plus any funding charges.

How to spread bet on indices example

You want to spread bet on the FTSE 100, which has an underlying market value of 10,650. We'll apply a one-point spread, so you can sell at 10,649.5 or buy at 10,650.5.

As you anticipate that the FTSE 100 is going to rise, you opt to buy at £10 per point at 10,650.5. The FTSE 100 has a margin factor of 5%, so you'd only need to deposit £5,325.25 (£10 x 10,650.5 x 5%).

If your indices spread bet was correct

Let's say your prediction is correct and the FTSE 100 increases in value. You close your position when the market reaches 10,690 — at the new sell price of 10,689.5. As the market moved in your favour by 39 points (10,689.5 – 10,650.5), your profit would be calculated by multiplying this figure by the amount you've bet per point, giving you a profit of £390 (£10 x 39) minus any funding costs.

If your indices spread bet was incorrect

However, let's say the FTSE 100 declined in price instead. You decide to cut your losses when it hits 10,610 — with a sell price of 10,609.5. The market has moved against you by 41 points (10,609.5 - 10,650.5), giving you a loss of £410 (£10 x 41), 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 4,100.00, with a buy price of 4,100.60 and a sell price of 4,099.40. 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 £6,149.10 (£30 x 4,099.40 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 4,080.00. You close your position at the new buy price of 4,080.60. As the market has moved in your favour by 18.8 points (4,099.40 - 4,080.60), you would be taking a profit of £564 (18.8 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 4,120.00, you would have made a loss. You'd close your position at the new buy price of 4,120.60. As the market has moved against you by 21.2 points (4,099.40 - 4,120.60), your total loss for the commodity spread bet would be £636 (21.2 x £30), plus any funding charges.

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