Best Spread Betting Offers

Best Spread Betting Offers
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Shobhit Seth is a freelance writer and an expert on commodities, stocks, alternative investments, cryptocurrency, as well as market and company news. In addition to being a derivatives trader and consultant, Shobhit has over 17 years of experience as a product manager and is the owner of FuturesOptionsETC.com. He received his master's degree in financial management from the Netherlands and his Bachelor of Technology degree from India.

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Spread betting lets people speculate on the direction of a financial market or other activity without actually owning the underlying security; they simply bet on its price movement. There are several strategies used in spread betting, from trend following to news-based wagers. Other traders look to capitalize on rare arbitrage opportunities by taking multiple positions in mispriced markets and putting them back in line.

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The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.

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The Basics of Options Profitability

Spread betting refers to speculating on the direction of a financial market without actually owning the underlying security.

An outright option is an option that is bought or sold individually and is not part of a multi-leg options trade.

Options are financial derivatives that give the buyer the right to buy or sell the underlying asset at a stated price within a specified period.

A derivative is a securitized contract whose value is dependent upon one or more underlying assets. Its price is determined by fluctuations in that asset.

An iron condor involves buying and selling calls and puts with different strike prices when a trader expects low volatility.

A short call is a strategy involving a call option, giving a trader the right, but not the obligation, to sell a security.

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Among the many opportunities to trade, hedge or speculate in the financial markets, spread betting appeals to those who have substantial expertise in identifying price moves and who are adept in profiting from speculation . One thing should be made clear: spread betting is currently illegal in the United States. 1 That said, it's still a legal and popular practice in some European countries, particularly in the United Kingdom. For this reason, all examples quoted in the following strategies are cited in British pounds, or GBP (£) .

Spread betting comes with high risks but also offers high-profit potential. Other features include zero taxes, 2 high leverage , and wide-ranging bid-ask spreads . If spread betting is legal in your market, here are few strategies you could follow.

Popular betting firms like U.K.-based CityIndex allow spread betting across thousands of different global markets. Users can spread bet on assets like stocks, indices, forex, commodities, metals, bonds, options, interest rates, and market sectors. 3 To do so, bettors often apply trend following , trend reversal , breakout trading, and momentum trading strategies for various instruments, and across various asset classes such as commodities, FX, and stock index markets.

Corporate moves can trigger a round of spread betting. For example, take when a stock declares a dividend and the dividend subsequently goes ex (meaning to expire on the declared ex-date ). Successful bettors keep a close watch on particular companies' annual general meetings ( AGM ) to try and get the jump on any potential dividend announcements, or other critical corporate news.

Say a company whose stock is currently trading at £60 declares a dividend of £1. The share price starts to rise up to the level of the dividend: in this case, somewhere around £61. Before the announcement, spread bettors take positions intended to gain from such sudden jumps. For example, say a trader enters a long-bet position of 1,000 shares at £60, with a £5 per point move. So in our example, with the £1 price increase upon the dividend announcement, the trader gains:

Similarly, bettors will seek to take advantage of the dividend's ex-date. Assume that one day before the ex-date, the stock price stands at £63. A trader may take a short position of 1,000 shares with a £10 spread bet per point. The next day, when the dividend goes ex, the share price typically falls by the (now-expired) dividend amount of £1, landing around £62.

The trader will close his position by pocketing the difference: in this case, a £10,000 profit:

Experienced bettors additionally mix spread betting with some stock trading. So, for instance, they may additionally take a long position in the stock and collect the cash dividend by holding it beyond the ex-date. This will allow them to hedge between their two positions, as well as gain a bit of income through the actual dividend.

Structuring trades to balance profit-and-loss levels is an effective strategy for spread betting, even if the odds aren't often in your favor.

Say that on average, a hypothetical trader named Mike wins four spread bets out of five, with an 80% win rate. Meanwhile, a second hypothetical trader, Paul, wins two spread bets out of five, for a 40% win rate. Who's the more successful trader? The answer seems to be Mike, but that might not be the case. Structuring your bets with favorable profit levels can be a game-changer.

In this example, say that Mike has taken the position of receiving £5 per winning bet and losing £25 per losing bet. Here, even with an 80% win rate, Mike's profits are wiped out by the £25 he had to pay on his one bad bet:

By contrast, say Paul earns £25 per winning bet and only drops £5 per losing bet. Even with his 40% win rate, Paul still makes a £7 profit (0.4 x £25 –0.6 x £5). He winds up the winning trader despite losing 60% of the time.

Spread betting often concerns the price moves of an underlying asset, such as a market index. If you bet £100 per point move, an index that moves 10 points can generate a quick profit of £1,000, though a shift in the opposite direction means a loss of a similar magnitude. Active spread bettors (like news traders ) often choose assets that are highly sensitive to news items and place bets according to a structured trading plan. For example, news about a nation's central bank making an interest-rate change will quickly reverberate through bonds, stock indices, and other assets.

Another ideal example is a listed company awaiting the results of a major project bidding. Whether the company wins or loses the bid means a stock price swing in either direction, with spread bettors taking positions based on both outcomes.

Arbitrage opportunities are rare in spread betting, but traders can find a few in some illiquid instruments. For example, say a lowly tracked index is currently at value 205. One spread-betting firm is offering a bid-ask spread of 200-210 for the closing price, while another offers a 190-195 spread. So a trader can go short with the first firm at 200 and long with the other at 195, each with £20 per point.

In each case, she still gets a profit of £250, as she nets five points, at £20 per point. However, such arbitrage opportunities are rare and depend on spread bettors detecting a pricing anomaly in multiple spread betting firms and then acting in a timely manner before the spreads align.

The high profit potential of spread betting is matched by its serious risks: the move of just a few points means a significant profit or loss. Traders should only attempt spread betting after they've gained sufficient market experience, know the right assets to choose, and have perfected their timing.

City Index by Gain Capital. " What Is Spread Betting? "

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Home » Broker » Best of Forex Brokers » 27 Best Spread Betting Brokers
Spread betting is a tax-free financial derivative that enables you to speculate on a huge range of financial markets, such as forex, indices, commodities, shares, and bonds.
And, as you don’t take ownership of the underlying asset, you can take advantage of markets that are falling as well as rising.
Spread betting enables you to speculate on markets that are decreasing in value, as well as those that are increasing.
So, while you could opt to mimic a traditional trade that profits if the underlying asset rises in the price – known as ‘going long’ – you could also open a spread bet that will profit if the underlying asset falls in price, known as ‘going short’.
In this article, we explore the 27 best spread betting brokers on the forex market today, so that you can take your trading to the next level.
Let’s get started with the full breakdown of the Best Spread Betting Brokers.
Rated #70 of Recommended FX Brokers
Alpari is among the longest-running online forex brokers in operation, having been established in 1998. It offers a range of accounts and allows clients from anywhere in the world, except the US and Canada.
Spreads are low and, because the company does not operate under European regulations, leverage is significantly higher than other brokers.
Caters to a wide range of trading styles and experience levels
Rated #1 of Recommended FX Brokers
ASIC, FSA, CBI, BVI,FSCA,FRSA,CYCES, ISA, JFSA
MetaTrader 4, MetaTrader 5, Ava Social, Ava Protect, Trading Central
AvaTrade was founded in 2006 in Ireland. They still maintain a strong presence there but have since grown to become one of the top forex brokers in the sector offering services around the world.
A low minimum deposit requirement of just US Dollar 100 across most of the available account types, coupled with respected regulation from several bodies worldwide, makes AvaTrade a popular choice for new and experienced traders alike.
Rated #20 of Recommended FX Brokers
* Etoro has lowered the amount of the minimum FTD to $ 50 for the following countries: Germany, Austria, Netherlands, Norway, UK, Ireland, Spain, Italy, Sweden, Switzerland.
eToro is one of the biggest names in the industry as far as the forex market is concerned.
They have been operating since 2007, and have become a household name around the world thanks to their excellent, top-tier regulation, and the unbeatable trading experience they offer to those looking to get involved in social trading or forex.
Only one base currency available for accounts
BDSwiss was founded in 2012. Since that time they have grown to become a major forex broker that now offers trading services in more than 180 countries worldwide.
They also have regulatory oversight in place from several trusted bodies in the industry including CySEC.
BDSwiss is also a very well-decorated broker having collected several awards, particularly in recent years as they have expanded their industry presence.
Being recognized as providing one of the best trading platform applications, as well as for their positive trading conditions and the environment has helped them greatly in continuing to improve their profile among traders.
Rated #32 of Recommended FX Brokers
FXTM is also known as ForexTime, started operating in 2011. It is headquartered in Cyprus, and in 8 years managed to gain global acclaim.
Besides the MT4 and MT5 platforms on the web and desktop, FXTM offers other trading features to users.
The FTXMInvest social trading program allows you to subscribe to other traders and make money. Through this program, you can gain access to other trader’s profits by depositing a certain amount of money.
Rated #38 of Recommended FX Brokers
FCA, CFTC, NFA, BaFin, FINMA, ASIC, FMA, MAS, FSA, FSCA, DFSA, JFSA, METI, MAFF.
IG is an online broker that offers four types of trading products, namely CFDs, spread betting, barriers, and vanilla options. As a subsidiary of public company IG Group Plc., IG has been in operation since 1974.
The company offers Contracts for Difference (CFDs), derivatives securities without actual ownership of the asset, on a variety of products. These include forex, indices, shares, commodities, cryptocurrencies, options, interest rates, and bonds.
Rated #194 of Recommended FX Brokers
FCA, CFTC, ASIC, FSC, BVI and IIROC
Established in 1996, and with two decades of experience under their belt, Oanda is one of the more established and well-respected online brokerages.
Although competing in an increasingly competitive market, Oanda has managed to continue to attract new customers to its platform. Through a global network of CFD and forex-related companies, Oanda has experienced rapid growth.
Rated #231 of Recommended FX Brokers
With roots stretching all the way back to the early 2000s, Forex.com is one of the most well-established players in the market. It falls under the corporate umbrella of Gain Capital UK, which is a registered UK financial services company that has been in operation since 1999.
Forex.com gives clients access to well over 200 global markets, which includes over 80 major and minor currency pairs, a range of indices, and shares.
Rated #226 of Recommended FX Brokers
City Index is the brand name of GAIN Capital who is known in financial circles around the world and is also listed on the New York Stock Exchange.
In terms of the broker standing in the sector, City Index is one of the cornerstone names in the entire industry, having been around since 1983.
Rated #66 of Recommended FX Brokers
Vantage FX is an all-around, award-winning ECN pricing / STP Forex broker. Their pricing is competitive, with good customer service and execution combined with a reasonable range (depending on the instruments you trade) of ECN Forex and DMA CFDs.
Rated #10 of Recommended FX Brokers
ASIC, FCA, CySEC, BaFin, DFSA, SCB, CMA
MetaTrader 4, MetaTrader 5 and cTrader, TradingView
Pepperstone is online forex, spread betting, and CFD broker with more than 57,000 clients in 65+ countries.
Pepperstone clients can trade CFDs on forex, shares, indices, cryptocurrencies, commodities, and currency indices across three popular trading platforms.
No added costs for withdrawals or deposits
Rated #37 of Recommended FX Brokers
IC Markets is a forex and CFD online trading platform that was founded in 2007.
IC Markets is an online broker is regulated by the FSA (Seychelles Financial Supervisory Authority), CYSEC (Cyprus Securities and Exchange Commission), an AFSL (Australian Financial Services Licence).
This online trading platform offers CFD products covering a decent range of financial assets including forex pairs, stocks, indexes, and commodities.
Rated #202 of Recommended FX Brokers
FxPro is a globally regulated Forex, CFD, and Spread Betting broker offering to trade on more than 250+ financial instruments covering For
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Best Spread Betting Offers

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