Spread betting calculator: calculate your margin, profit and loss
Before placing a spread bet, two numbers matter most: how much margin you need to open the position, and how much you stand to gain or lose if the market moves. Our spread betting calculator works both out instantly. This guide explains how to use it and how spread betting margin works.
How the spread betting calculator works
Spread betting uses leverage, meaning you only deposit a fraction of the full trade value as margin to open a position. This amplifies both potential profits and potential losses relative to your initial outlay. Using a spread betting calculator before you trade helps you understand your exposure, plan your position size and manage risk more effectively.
How to use the spread betting calculator
The calculator works out your margin requirement and potential profit or loss for any spread bet in three steps:
- Enter the market you want to trade and your bet size in pounds per point. One point is the minimum price movement for your chosen market.
- Enter your opening price and the price at which you expect to close the trade. If you are not sure, use a round number to model a specific points move, for example 50 points.
- Select whether you are going long (buy) or short (sell). The calculator will display your margin requirement and your projected profit or loss based on the price move entered.
The output shows two figures: the margin needed to open the position (your deposit), and the profit or loss if the trade closes at your target price. Changing the bet size or points move updates both figures instantly.
Key Takeaway
The margin requirement shown by the calculator is the minimum amount you need in your account to open the position. Your actual profit or loss will be based on how many points the market moves from your opening price, multiplied by your bet size in pounds per point.
How to calculate spread betting profit and loss
Spread betting profit and loss is calculated using a straightforward formula:
Profit or loss = (Closing price - Opening price) x Bet size (£ per point)
Long trade example
You bet £5 per point on the FTSE 100 at an opening price of 8,500. The index rises to 8,600, a move of 100 points.
Profit = (8,600 - 8,500) x £5 = 100 x £5 = £500
If the index had instead fallen to 8,400, a move of 100 points against you:
Loss = (8,500 - 8,400) x £5 = 100 x £5 = £500
Short trade example
You bet £2 per point to sell (go short) EUR/USD at 1.0850. The pair falls to 1.0800, a move of 50 points (pips) in your favour.
Profit = (1.0850 - 1.0800) x £2 = 50 x £2 = £100
If EUR/USD had instead risen to 1.0900, the 50-point move against you would produce a loss of £100.
Quick fact
Spread bets are quoted in points, not pence or pounds. A 'point' is the minimum price movement for a market, which varies by asset. For UK indices such as the FTSE 100, one point is one index point. For most forex pairs, one point is one pip (0.0001). For UK shares, one point is usually one penny.
What is spread betting margin?
Spread betting margin is the deposit you need to open a leveraged position. It is expressed as a percentage of the total position value. A margin requirement of 5% on a position worth £10,000 means you need to deposit £500 to open the trade, while your full exposure is still £10,000.
Margin rates in the UK are set by the FCA under permanent rules that came into force in 2019, having initially been introduced as temporary measures by ESMA in 2018. They apply to all UK-regulated spread betting providers and cannot be reduced for retail clients below the regulatory minimum.
FCA margin rates by asset class (retail clients)
| Asset class | Maximum leverage | Minimum margin rate | Example |
| Major forex pairs (EUR/USD, GBP/USD, USD/JPY, etc.) | 30:1 | 3.33% | £333 margin to open a £10,000 position |
| Minor forex pairs, gold | 20:1 | 5% | £500 margin to open a £10,000 position |
| Major indices (FTSE 100, S&P 500, Dow Jones, DAX) | 20:1 | 5% | £500 margin to open a £10,000 position |
| Minor indices, other commodities | 10:1 | 10% | £1,000 margin to open a £10,000 position |
| Individual shares | 5:1 | 20% | £2,000 margin to open a £10,000 position |
| Cryptocurrencies | 2:1 | 50% | £5,000 margin to open a £10,000 position |
These are the FCA minimum rates, as set out in PS19/18. We may apply higher margin rates than the regulatory minimum on certain markets or during periods of high volatility. The calculator uses current applicable rates. Professional clients may be eligible for higher leverage, subject to meeting the FCA's eligibility criteria.
Key Takeaway
Margin rates for retail spread bettors in the UK are capped by the FCA at between 3.33% and 50% depending on the asset class. Major forex pairs require the least margin at 3.33%; cryptocurrencies require the most at 50%. These rates have been permanent since 2019 and apply to all FCA-regulated providers.
How to calculate spread betting margin
Margin is calculated as a percentage of the full position value, not your bet size. Here is the formula:
Margin required = Position value x Margin rate
Position value = Bet size (£ per point) x Market price
FTSE 100 margin calculation example
You want to bet £10 per point on the FTSE 100 at a current price of 8,500.
Position value = £10 x 8,500 = £85,000
Margin required (at 5%) = £85,000 x 5% = £4,250
So to control an £85,000 position, you deposit £4,250. If the FTSE moves 100 points in your favour, you profit £1,000 (£10 x 100). If it moves 100 points against you, you lose £1,000.
Individual share margin calculation example
You want to bet £1 per point on Barclays shares at a current price of 300p.
Position value = £1 x 300 = £300
Margin required (at 20%) = £300 x 20% = £60
A 50-point move in your favour returns £50. A 50-point move against you costs £50. Your margin is £60 but your loss potential is not limited to it. If Barclays falls 100 points, you lose £100, which exceeds the margin deposited.
Key Takeaway
Your margin is not the maximum you can lose. It is the minimum deposit required to open the position. Losses can exceed your margin, and in extreme cases can exceed your total account balance. Negative balance protection under FCA rules means retail clients cannot lose more than the total funds in their spread betting account with us, however this doesn’t apply to professional investors.
Spread betting margin: variation margin and margin calls
There are two types of margin in spread betting: initial margin and variation margin.
Initial margin
This is the deposit required to open a position, calculated using the formula above. It is reserved in your account at the point of opening the trade.
Variation margin
As the market moves against your position, unrealised losses reduce your free equity. If losses erode your account balance to below the margin maintenance level, you will receive a margin call, requiring you to deposit additional funds or reduce your position.
Under FCA rules, firms must close out a client's open positions when their account equity falls to 50% of the total margin required to maintain those positions. This is the margin close-out rule. It applies on a per-account basis and is designed to prevent losses from accumulating beyond a manageable level.
| Margin type | Definition | When it applies |
| Initial margin | Deposit required to open a position | At the point of placing the trade |
| Variation margin | Funds required if losses reduce account equity | When unrealised losses reduce free equity below the maintenance threshold |
| Margin close-out | Automatic position closure at 50% of required margin | When account equity falls to 50% of total margin required across all open positions |
Managing spread betting margin effectively
Understanding your margin requirements is only the first step. Here is how experienced traders manage margin and position sizing:
- Never commit all available capital as margin. Retaining free cash in your account means you can withstand adverse market moves without a margin call.
- Use stop-loss orders to define your maximum acceptable loss on a trade before you open it. A guaranteed stop (which carries a small premium) ensures closure at your exact stop level, even if the market gaps.
- Size positions based on your risk per trade, not just the margin requirement. Risking a fixed percentage of your account per trade (for example 1-2%) limits the damage from any single losing position.
- Be aware that margin rates can increase during periods of heightened market volatility, particularly around major economic events. Check current rates in the deal ticket before placing a trade.
- Monitor open positions actively. Spread betting positions do not expire like options, but overnight positions incur financing charges that can erode profits on long-running trades.
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Spread betting calculator FAQs
What is spread betting margin?
Spread betting margin is the deposit required to open a leveraged position. It is expressed as a percentage of the total position value and ranges from 3.33% for major forex pairs to 50% for cryptocurrencies under FCA rules.
How is spread betting margin calculated?
Multiply your bet size by the current market price to get the total position value, then multiply by the applicable margin rate. For example, a £10 per point bet on the FTSE 100 at 8,500 gives a position value of £85,000. At a 5% margin rate, you need £4,250 to open the trade.
Can I lose more than my margin in spread betting?
Yes. Your margin is the deposit required to open a position, not a cap on your losses. Losses can exceed your initial margin if the market moves significantly against you. Under FCA rules, negative balance protection means retail clients cannot lose more than the total funds in their account.
What is a margin call in spread betting?
A margin call occurs when your account equity falls below the margin maintenance threshold due to unrealised losses. You can respond by depositing additional funds or closing positions to reduce your margin requirement. Under FCA rules, positions must be closed when account equity falls to 50% of total required margin.
What is the difference between spread betting and CFD trading?
Both use leverage and margin in the same way, and both are subject to the same FCA leverage limits. The key differences are that spread bets are exempt from UK capital gains tax and stamp duty, while CFD profits may be subject to CGT. Spread bets are quoted in pounds per point; CFDs in units of the underlying asset.
Are spread betting margin rates fixed?
FCA minimum rates are fixed by regulation and apply to all UK-regulated providers. However, individual providers can apply higher rates than the regulatory minimum, and rates may be increased on specific markets during periods of high volatility. Always check the current rate in the deal ticket.
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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