Spread betting vs share dealing

Spread betting and share dealing are two of the most popular ways to trade on IG’s range of global shares. Explore the differences between the two products – including leverage and ownership of shares.

Are you ready to start spread betting?

Spread betting advantages

  • Trade forex, commodities, shares, indices and more

  • No capital gains tax or stamp duty*

  • Deal on leverage: open a position for a fraction of the full value of the trade, though losses can exceed deposits

  • Go long and short

  • Dividend adjustments offset any changes in the price of the underlying market 

  • Commission free, with all costs included in the spread

  • 24-hour dealing on key markets

  • No shareholder privileges

Share dealing advantages

  • Trade shares and ETFs

  • Gain tax-free profits by trading via a stocks and shares ISA or SIPP*

  • Put up the full value of the trade

  • Speculate only on shares that rise in value

  • Receive dividends (if paid)

  • Commission paid on all trades

  • Deal during exchange opening hours

  • Gain shareholder rights, such as voting privileges

Spread betting and share dealing differences explained

financial spread bet enables you to take a position on whether an underlying market will rise or fall in value. You never own the asset itself, and because spread betting is a leveraged product, you only need to put a fraction of the full value of the trade – or the ‘margin’ – to gain full exposure. All spread bets come with a fixed expiry date.

Share dealing allows you to buy shares for their full value, offering a way to hold them for as long as you like and enjoy shareholder privileges. Unlike spread betting, you’ll have to pay stamp duty on each trade and capital gains tax on any profits, except those protected in a tax-free stocks and shares ISA or SIPP.


 

Is share dealing or spread betting best for me?

You can use both spread betting and share dealing as part of your trading strategy, or stick to either product exclusively. Here are a few points to consider as you decide which option works for you.

Spread betting could be for you if...

   

  • You want to gain exposure to a range of asset classes

  • You want profits to be free from tax

  • You want reduced sizes on share deals, without having to pay a minimum commission

  • You want to trade on both markets that fall and those that rise

  • You want to trade in sterling, even when speculating on international markets

Share dealing could be for you if…

   

  • You want tax-free profits via ISAs and SIPPs

  • You want to limit your potential losses to your initial outlay

  • You want to learn more about the markets before you undertake the added risks of leveraged trading

  • You want to make the most of shareholder privileges

An investor’s guide to spread betting

Make your market knowledge go even further with our free three-part guide to spread betting

  • Discover the benefits and risks of spread betting on the markets

  • Take a closer look at our dealing platform and risk-management tools

  • Learn how to identify and act on new opportunities

Form has failed to submit. Please contact IG directly.

  • I’d like to receive information from IG Group companies about trading ideas and their products and services via email.

Get my guide

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

Example: Barclays spread bet vs share deal

Spread bet

Share deal

 
Spread bet
Share deal

Underlying price

208 208

Our price

207.5 / 208.5 208

Deal

Buy at 208.5 Buy at 208

Deal size

£20 per point 2000 shares

Initial outlay

£208.50

(Margin = exposure x 5% margin factor)

£4160

(2000 shares at 208p)

Stamp duty

None £20

Capital gains tax

None £72

Close price

Sell at 229 Sell at 229

Profit

£410

(20.5pt increase x £20 per pt)

£400*

(4580 – 4160 = 420, less stamp duty)

 

*Not including commission fee

Technical differences between spread betting and share dealing

  Spread betting Share dealing
What is it? The placing of a bet that allows you speculate on a range of outcomes. The buying and selling of physical shares in a company.
Are there expiries? Yes, fixed expiry dates. No expiry dates.
Do I pay tax? There’s no capital gains tax or stamp duty.* You pay stamp duty on each trade and capital gains tax on any profits, except those made from trades using a stocks and shares ISA or SIPP.
When can I trade?

We offer 24-hour dealing on forex and major stock indices; during the underlying market hours for other markets.

 

We also offer weekend trading on selected markets.
Only when the related exchange is open.
Do I pay to keep positions open? Overnight funding on daily funded bets. Rollovers on forwards and futures. No.
What kind of trading is it suitable for? Intra-day
Daily
Medium-term

Long-term

Investing
Can I receive dividends? We make a dividend adjustment on equity and stock index spread bets. Yes.
Is it used for hedging? Yes. Rarely, as spread bets and CFDs are more effective. 
Range of markets More than 15,000 markets, including:
 

Forex

Stock indices

Shares

ETFs and ETCs

Metals

Energies

Spot metals

Soft commodities

Options

Sprint bets

Interest rates

Bonds

Sectors

Share forwards

Forex forwards

Daily stock index futures

Stock index futures

Daily oil futures

Shares and ETFs only, but more than 9000 from a range of stock indices in local denominations:  
                                                                         
UK indices including:

FTSE 100

FTSE 250

Other small cap UK stocks


US indices including:

S&P 500

NASDAQ 100

Other small cap US stocks
 

European indices including:

DAX

HDAX

MDAX

Irish ISEQ

Dutch AEX

The charges A spread on all markets.
No commission.
Funding adjustments (excluding futures and forwards).
Commission on all trades.
A currency conversion fee on international shares.
Dealing platforms Web trading platform
Mobile app (iPhone, Android) 
Tablet app (iPad) 
MetaTrader 4
ProRealTime

Web trading platform
Mobile app (iPhone, Android)
Tablet app (iPad)

L2 dealer (DMA)

Direct market access (DMA) No. Yes.

Open an account now

It's free to open an account, takes less than five minutes, and there's no obligation to fund or trade.

You might be interested in...

  • Platforms and apps

    Browser-based desktop trading and native apps for all devices

  • Our charges

    We're clear about our charges, so you always know what fees you will incur

  • Learn about IG

    See how we've been changing the face of trading for more than 40 years

* Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.

Help and support

Get answers about your account or our services.

Get answers

Or ask about opening an account on 0800 195 3100 or newaccounts.uk@ig.com.

We're here 24hrs a day from 8am Saturday to 10pm Friday.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.