Financial Spread Trading
Spread betting is a high-risk, high reward activity. It offers a tax efficient way of gaining exposure to a wide range of investments across the global financial markets*. It’s a versatile tool that can help you to profit (if you bet in the right direction) from both up and downward movements in prices.
A spread bet is an agreement between a client and a provider to exchange the difference between the opening and closing value of the bet at a future date – this date may or may not be specified depending upon what you are trading. You are speculating on the direction of the future price movements in an underlying instrument and you indicate the amount you want to bet on each point movement. Your profit or loss is simply the difference between the opening price and closing price of your bet, times your stake. You can bet on a variety of instruments including major indices, currencies, commodities, individual equities quoted on leading exchanges, and their associated options.
Advantages of spread betting over conventional forms of trading:
- No direct commission or UK stamp duty (commissions effectively built into the spread)
- Ability to bet on markets going down (going short) as well as up (going long)
- All profits are free of UK Capital Gains Tax*
- Leverage – deposit only a fraction of the contract value
Disadvantages of spread betting
Although they present an opportunity to make significant profits, the geared nature of spread bets means that a relatively small movement in price of the underlying security will result in a much larger movement in the value in the spread bet. It is possible to quickly lose more money than your initial deposit.
There are significant advantages of spread betting with Barclays Stockbrokers Financial Spread Trading
- Competitive margin requirement
- Instant execution
- Fully interactive online dealing
- Extended trading hours (for certain markets)
- Limited risk bets (Guaranteed Stop Loss Orders) available on certain markets (subject to the payment of a premium fee)
- Small minimum stake sizes (from £3 per point)
For more detailed examples about how spreadbetting works and many more examples of the instruments you can trade, please download our brochure.
Important Information
* Tax laws can change. Spread betting profits and losses are not currently subject to UKCapital Gains Tax. UK stamp duty is also not currently payable.
Barclays Stockbrokers Limited and City Index Limited have remuneration and fee sharing agreements in place. Details of any shared commission, spreads, finance charges and fees shared for CFD and Financial Spread Trades placed are available upon request.
Please note that you are betting on the outcome of the share price and are not taking delivery of a share and are therefore not entitled to the payment of actual dividends. However, adjustments may be made to your account from time to time to reflect the treatment of dividends in the underlying equity. Please see the market information sheet. Subject to meeting all your obligations, bets may be left to run to their stated expiry or you may close the bet at any time during the advertised trading hours relevant to the market.
