How Does It Work?
The "spread" in the phrase Spread Betting refers to the Sell (Bid) and Buy (Offer) price quoted by a spread betting company. This price is calculated around the live (or the estimated future) market price of a financial product.
When you spread bet, you do not buy the stock or share but instead you make a bet as to which way you think the market or share-price will move. You can bet per penny or point movement - the amount you wish to bet is known as the "stake", and can be as little as £1/?1/$1 per point or penny movement.
You can then bet £1/$1/?1 per point/tick/cent on the movement of spread prices that we quote. You can choose to bet that the market will rise, or alternatively, you can bet that it will fall. If you are right, you will make a profit of your stake, multiplied by each point that the market moves in your favour. If you are wrong, you will make a loss calculated as your stake, multiplied by each point that the market moves against you.
For this reason you must be aware that your losses can increase dramatically if the markets move substrantially in the opposite direction to your bet (i.e. if you make an Up Bet in the FTSE 100 and instead of going up, it goes down).
At Capital Spreads we want you to enjoy your Spread Betting experience. The automatic Stop-Loss facility we provide ensures that you limit any financial loss to a pre-agreed amount before you open a trade (stop losses are not guaranteed). For more information about Stop-Losses and other types of Order, please click here.
All Spread Betting profits are recognised as the winnings of a bet, and are therefore free of Capital Gains and Income Tax in the UK.
If you are new to Spread Betting, we strongly recommend you open an online Demo Account and refer to our online User Manual for instructions on how to make a bet.
