Spread betting

Spread betting works by enabling you to bet on the future direction of a market. As the market moves in your chosen direction, your bet will earn a profit. If the market moves against you, your bet will earn a loss.

Say, for example, that you bet £5 per point that the FTSE 100 will rise. For every point that the FTSE goes up, your trade will make £5. For every point it falls, you’ll lose £5.

You only realise any profit or loss when you close the position. If the FTSE has moved up 100 points when you close, your profit will make you (£5 * 100 points) £500. If it has moved down 100 points, you’ll lose £500 instead.

Learn more about the ins and outs of spread betting.

If you’re entirely new to the markets, then we wouldn’t recommend leaping straight into spread betting with a live account. We have lots of resources to make sure you’re fully equipped before risking any real capital: including the City Index Academy and a free trading demo.

In trading, the spread is the difference between the buy and sell prices quoted on a market. For instance, if the DAX has a buy price of 15,904 and a sell price of 15,900, then it has a four-point spread.

On spread betting markets, the spread also contains the cost to open and close positions. Instead of paying commission when you trade, your costs are covered by the spread.

Find out more about the spread.