7 UK Spread Betting Platforms in December 2023 with Low Fees

5. IG – Access over 17,000 spread betting markets; trade with leverage of up to 1:30; negative balance protection

IG is an established online brokerage firm that covers several divisions in the investment scene. This includes traditional shares and funds, CFDs, forex, and spread betting. In total, IG gives users access to over 17,000 spread betting markets – which is huge.

This covers a variety of asset arenas, with a strong focus on forex, indices, shares, and commodities. Each and every spread betting market offers a long and short position, as well as leverage. Once again, this is capped at 1:30 for UK retail clients.

Much higher limits are available with a professional IG trading account. This stands at over 1:222 when spread betting forex, indices, and commodities. Either way, it is not possible to lose more than the trading balance permits when entering a leverage position at IG, as the platform has that all-important Negative Balance Protection in place.

In terms of fees, IG allows traders to use its spread betting platform in a commission-free manner. However, users should keep an eye on the spread, which is largely very competitive at IG. For example, indices and shares can be traded at just 0.1 points, commodities at 0.3 points, and forex at 0.6 points.

IG is available as a desktop trading platform that can be accessed through the website. The broker also offers a mobile app that is compatible with iOS and Android phones. The minimum deposit at this UK spread betting platform is £250. IG supports debit cards and UK bank transfers.

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6. ETX Capital – Trade over 5000 instruments; regulated by the FCA; pips from 0.6

Founded way back in 1965, this London-based spread betting platform has a positive reputation. The provider offers an abundance of markets that span over 5,000 financial instruments. This means that traders can spread bets on popular assets like shares, forex, indices, hard metals, and energies.

ETX Capital is a reputable spread betting platform in the UK if you want to stake small amounts. This is because major markets can be traded at just 10 pips per point. As such, ETX Capital is one option for traders who want to give spread betting a go without risking too much money.

In terms of trading costs, ETX Capital is another spread betting platform that operates a commission-free policy. Once again, this means that traders need to focus on the spread. This is largely competitive at ETX Capital, as traders can trade EUR/USD and AUD/USD for just 0.6 and 0.8 points, respectively. For traders who are planning to spread bet shares or indices, this is also competitive.

For example, UK, US, and European shares carry a spread of just 0.1%. If you’re interested in FTSE 100 spread betting – this is even more competitive at 0.05%. Traders can open an account and deposit funds with a debit card or e-wallet. The minimum deposit is just £100 at this UK FCA broker.

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7. Markets.com – Trade with leverage in the UK; access stocks, currencies, indices, ETFs and shares; free demo trading account

Markets.com is an online trading platform that offers a stripped-back way to trade online via a jargon-free platform that can be accessed via a web browser.

On top of conventional CFDs, Markets.com offers a comprehensive spread betting facility.  At the time of writing, this covers 67 currency pairs, 28 commodities, 40 indices, 60 ETFs, and over 2,000 shares. All of these markets can be traded with leverage, as per UK limits.

Markets.com allows traders to start off with a free demo account facility. This means that traders can practice spread betting endeavors without risking any money. There is also an ‘Introduction to Trade’ department on the platform, which offers a range of guides and explainers.

When it comes to fees, this will depend on which spread betting market users wish to access. For example, the likes of forex, commodities, and indices can be traded commission-free, so it’s just the spread that needs to be paid. Markets.com offers 0.90 pips on EUR/USD, $0.50 on gold, and just $0.05 on spot crude oil.

For users who are interested in stocks, they will also need to factor in a commission. This stands at $10 per slide. This means that irrespective of how much is being staked, traders will pay $10 to enter the stock trade and $10 to close it, plus the spread.

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What Is Spread Betting?

Spread betting is a form of trading in which a bet is placed in the direction of the price movement of a particular financial instrument, such as a stock, currency pair, or commodity. The bet is placed on the difference between the buying and selling price of the asset, also known as the spread.

Spread betting allows traders to speculate on the future price movements of an asset without actually owning the underlying asset. Instead, traders bet on the direction the price will move and the amount they want to bet per point of movement.

If the trader’s prediction is correct, they earn a profit based on the amount of the bet and the number of points the asset has moved in their predicted direction. However, if the price moves against the trader’s prediction, they can incur losses.

Spread betting is popular in the UK because it is exempt from capital gains tax and stamp duty, making it a tax-efficient way to trade. However, it is also a high-risk form of trading, and traders can lose more than their initial stake if the market moves against them. It is important to understand the risks and seek professional advice before engaging in spread betting.

Is Spread Betting Taxed In The UK?

In the UK, spread betting is not subject to capital gains tax or stamp duty, making it a popular form of trading. However, it’s worth noting that tax laws can change, and it’s always wise to consult with a tax professional to ensure compliance with current regulations.

It is also worth noting that spread betting is considered to be a form of gambling, which means that it could one day be taxed in the UK. If you start spread betting with a popular broker, it is a good idea to stay up-to-date with the latest government tax information.

Key Features of Spread Betting Platforms in the UK 

We have reviewed four spread betting brokers in the UK. There are, however, many others that offer spread betting facilities to UK traders.

No two providers are the same in the spread betting space. For example, while some are known for low fees, commissions, and spreads, others stand out because they provide access to thousands of markets. It’s worth noting – the options on this page are for financial spread betting.

To ensure you choose the right spread betting platform in the UK, below we discuss common features that are offered by UK spread betting providers.

Regulation

In the UK, spread betting platforms are heavily regulated. This is why all of the spread betting platforms that have been discussed on this page are authorized and licensed by the Financial Conduct Authority (FCA). This ensures that traders are able to trade in a fair and transparent manner.

It also ensures that capital is protected from a potential brokerage collapse. For example, FCA-regulated spread betting platforms must keep client funds in segregated, tier-one bank accounts. Platforms will also need to collect two forms of ID from you, including a passport and proof of address.

Take note that although spread betting is classified as ‘gambling’ in the eyes of HMRC, the Gambling Commission has no remit in this industry.

Markets

In order to support diverse trading, spread betting platforms often offer multiple markets that can be traded. Here is an overview of some of the markets that are available through spread betting platforms.

• Shares: Markets covering stocks listed in the UK and abroad
• Hard Metals: Gold, silver, and platinum
• Energies: Crude oil and natural gas
• Forex: Variety of major, minor, and exotic currency pairs
• Indices: FTSE 100, Dow Jones 30, Nasdaq 100, S&P 500, and more

Visit the platform’s website to view the full list of markets that are available.

Fees

There are fees involved with spread betting in the UK. Fees include spreads, commissions, account management fees, overnight fees, withdrawal fees, and deposit fees. Trading platforms should state the exact fees that are charged on their websites.

Here is an overview of some of the fees that are involved with spread betting.

Commission

One spread betting platform in the UK that we came across, Ava Trade, allows traders to trade in a commission-free manner across all supported markets. This is also the case with Pepperstone, ETX Capital, and City Index. However, certain platforms in this space will charge a commission for entering and exiting a trade.

For example, Markets.com charges a commission of $10 per slide on all stock trading markets. This can be very costly for traders who are planning to trade small amounts. Other spread-betting platforms will charge a variable commission. For example, a user might pay 0.1% per slide, so a £1,000 stake would amount to a commission of £1.

Spreads

Unless you are opening a specialist ‘Raw’ account with the likes of Pepperstone, you will always need to consider the spread. In fact, this is how commission-free brokers like Pepperstone make money.

In a nutshell, the spread is the difference between the buy and sell price on a chosen market. Apart from forex, which is assessed in ‘pips’, spread betting platforms operate in ‘points’. The larger the gap between the buy and sell prices, the more it will cost to trade.

Overnight Financing

Spread betting platforms are not geared towards long-term investors. Instead, they allow traders to speculate on the future price of an asset in the short run. Crucially, this is because spread betting markets attract overnight financing fees.

This means that for every day that a trader keeps their spread betting position open, they will pay a small fee. This is like an interest rate charged by the platform, which is multiplied by the size of the stake.

Trading Tools and Features

We found that the UK spread betting platforms will offer a variety of trading tools and features that might be of interest.

These include:

Leverage

Unlike traditional stock trading platforms, spread betting companies allow you to trade with leverage. As we briefly covered earlier, this allows you to boost the size of your position. The limits available to you are capped by the FCA.

For example:

• Pepperstone allows you to trade with leverage of 1:30 on major forex markets.
• If, for instance, you traded with GBP/USD with a stake of £10 per point, this would boost your position to £300 per point
• As such, if you made gains of 20 points on this trade, your profit would go from £200 up to £6,000

Make sure your chosen spread betting platform offers Negative Balance Protection. This will ensure that you never lose more than you have available in your trading account.

Risk Management

Spread betting is a lot riskier than conventional stock investing, so it’s crucial that you choose a platform that offers risk management tools. For example, many of the platforms that we have discussed on this page offer stop-loss orders.

As the name implies, this will automatically close your spread-betting trade when it goes against you by a certain amount. For example, if you stake £5 per point and wish to limit your losses to £50, then you can set up a stop-loss order at 10 points. This, in addition to Negative Balance Protection, will ensure that you never lose more than you can afford.

Third-Party Platforms

If you’re an experienced trader, then you might want to choose a spread betting broker that offers support for third-party platforms. Think along the lines of MT4, MT5, and cTrader. In doing so, you will have access to an abundance of advanced trading features, such as customizable charts, drawing tools, and technical indicators.

These third-party platforms also support automated robots. This means that the robot will place spread betting trades on your behalf 24/7.

Education

Pepperstone offers a huge range of educational tools to help you become a better trader. For example, the provider offers fully-fledged spread betting guides, which cover risk management and potential spread betting strategies to consider. The ‘InvestMate’ app also offers mini-courses on all-things trading.

User Experience

Spread betting platforms should provide a user-friendly experience that enables traders to efficiently navigate the trading tools and features. This could include providing users with a mobile app, providing a clear dashboard and platform structure, facilitating various trading strategies, and offering a platform walkthrough to demonstrate how the platform can be used.

Demo Account

Demo trading facilities offer traders a way to familiarize themselves with the intricate instruments provided by spread betting brokers. With these facilities, you can place spread betting positions without the need to deposit or risk any actual money; instead, you’ll be trading with demo funds. In many cases, the demo account replicates real trading conditions, including pricing, liquidity, and volume.

Before starting with a spread betting demo account, it’s essential to check a couple of key factors. Firstly, ensure that the broker doesn’t require a deposit for access. Additionally, determine the amount of demo trading funds you’ll receive. Crucially, determine if there’s a time limit on the usage of the demo account.

Payment Methods

The spread betting platforms that we have reviewed provide a variety of payment methods to suit different traders.

Spread betting platforms in the UK will usually support debit cards. Many now accept e-wallets too, which is also safe and instant. If you want to deposit through a traditional bank account transfer, this might take a couple of days to process.

You should also explore what fees are applicable to your chosen payment method. Pepperstone is well-known in this respect, as it doesn’t charge anything on deposits or withdrawals. This won’t always be the case, though, with the likes of ETX Capital charging £10 on withdrawals of less than £100.

Customer Service

Whether you are looking for an explanation of a specific spread betting market or you want an update on a withdrawal request, it’s important to stick with spread betting platforms that offer 24/7 customer support.

For example, Pepperstone offers a 24/7 live chat facility as well as a dedicated telephone support line. In fact, this spread betting broker also offers support via WhatsApp, Facebook, Viper, and Telegram.

Conclusion

The provisional 2022–2023 year-to-date (April–March) total for GBD receipts is £1,015 million – the best proof of the popularity of this activity. UK spread betting brokers offer an alternative to conventional trading platforms. In other words, by using CFD trading platforms and forex trading platforms traders will need to pay tax on their profits. But by trading via a spread betting facility instead, traders can keep 100% of their trading gains.

The important thing is that you choose the appropriate spread betting broker in the UK for your needs. To do this, focus on metrics like supported spread betting markets, commissions and spreads, minimum trade per point, and, of course, FCA regulation.

FAQs

References:

• https://www.ig.com/uk/spread-betting/what-is-spread-betting-how-does-it-work
• https://www.independentinvestor.com/spread-betting/how-spread-betting-is-taxed/
• https://www.valutrades.com/en/blog/negative-balance-protection-why-it-pays-to-trade-with-valutrades
• https://www.handbook.fca.org.uk/handbook/glossary/G1118.html
• https://www.cityindex.com/en-uk/trading-academy/courses/trading-with-leverage/overnight-funding-explained/