Spread Betting Forex

Spread Betting Forex
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider . You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.

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Spread betting forex

Spread bets are a derivative trading product that allow you to trade tax-free in the UK* and Ireland
You can bet on both sides of the market, taking either a buy or sell position
A narrower spread means you can enter and exit trades more quickly
Our margin rates start at just 3.3% or a 30:1 leverage ratio for major currency pairs
Popular forex trading strategies that can be used with a spread betting account include scalping, day trading, swing trading and hedging

Learn how to spread bet. Consult our article on ' what is spread betting ' for more details about the derivative product.

Learn about forex trading. Read about costs and examples to help you along the way, including the top forex trading strategies .

Choose your currency pair. Whether you're interested in major, minor, or exotic currencies, we have 330+ forex pairs on offer.

Find a trading opportunity. Decide whether you want to buy (go long) or sell (go short) and define your entry and exit points to place a trade.

Trade on mobile. You can set price alerts and trading notifications to pop up on your mobile so that you never miss a potential trade.

What are some tips for forex spread betting?

What is the best spread betting platform for forex trading?

What are the margin rates for spread betting forex?

How can I spread bet on multiple currencies?

Can you spread bet on forex forwards?

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Published on: 09/11/2021 | Modified on: 19/08/2022

Spread betting forex is a type of spread betting that involves speculating on the price movements of currency pairs. Spread betting in forex involves opening a position based on whether you think the price of a currency pair is due to rise or fall, resulting in either profits if the market moves in your favour, or losses if the market goes against you.

This article discusses the best tips and strategies for currency spread betting, along with the differences between spread betting and CFDs. We offer 330+ forex pairs on our online trading platform, including major forex currency pairs, such as the EUR/USD and USD/JPY, as well as minor and exotic crosses.

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Spread betting forex is a tax-free* method of trading the currency markets. Traders are able to speculate on the price movements of currency pairs by opening a position based on whether they think the currency will appreciate or depreciate. If you expect the value to rise, you would open a long or ‘buy’ position, or if you expect the value to fall, you would open a short or ‘sell’ position.

With a spread betting account, you never own the underlying asset. If the market moves in your favour, this will lead to capital profits, but equally, if the market moves against your position, this will result in losses.

When trading currency pairs, there are usually two quotes given: the bid price and the ask price. The difference between the bid (sell) price and ask (buy) price of a currency pair is referred to as a spread in forex . In general, traders prefer currency pairs with tighter spreads, as this allows them to enter and exit trades more quickly with lower transaction costs.

View our forex market page for a full breakdown of the spreads, margins and leverage ratios that we currently offer for FX spread betting.

Whereas spread betting is a product or method that allows traders access to the financial markets to speculate on price movements, forex trading is simply the market involved. Spot forex requires an investor to buy and sell currency pairs at the current market spot price, whereas spread betting allows the trader to speculate on the price movements of the underlying asset, without taking ownership.

Many independent spot forex brokers charge tax on profits, as there will be some sort of ownership involved. No physical purchase takes place in forex spread betting; therefore, traders do not need to pay stamp duty or capital gains tax with a forex spread betting account. This is the main difference between spread betting and forex trading, along with the use of leverage . There is also no commission to pay when spread betting forex.

Choose between a live account to deposit funds and start trading now or a demo account to practise beforehand with £10,000 worth of virtual funds.
There is a wide range of forex spread betting strategies that can be applied to the market, and some that are particularly effective when trading in the short-term, as linked above. These include trend following, news trading, forex scalping and hedging forex , of which the latter is a method of protecting against currency risk.

Before you begin trading, you should strengthen your knowledge of spread betting first. Read our spread betting tips and strategies guide to learn how this trading method can be applied to all markets, including foreign exchange.

Forex trading can often be volatile, therefore we advise you to brush up your knowledge of forex to learn the basic rules of currency pairs. We have a team of dedicated market analysts that provide daily updates on the financial markets in our news and analysis section.

It is worth creating a trading plan in order to strategize how you will enter and exit the forex market. This helps with consistency and organisation, as well as removing any emotion from your trading decisions, which can often end in rash decisions.

Part of your trading plan should include risk-management precautions . In particular, it is a good idea to set a limit of the maximum capital you are willing to lose and sticking with it. Stop-loss orders are risk management tools that specify an exact price for closing your position when the markets move against your spread bets. The forex market is known for occasional volatility and rapid price movements, therefore, this tool will help to minimise your losses.

Spread betting is the most popular product on our platform in the UK, closely followed by CFD trading .
With CFDs, you can trade on the forex market in a similar way to spread betting, by speculating on currency pair price movements. You also do not have ownership of the underlying asset. Contracts for difference are derivative products that require a trader to exchange the difference in value of a currency pair between the time that the position opens and closes. Likewise, if the market moves in your favour, you may experience profits, but if the market moves in an opposing direction, you may experience losses. Read our CFD definition article for more information.

Both products use leverage to gain better exposure to the FX market. CFDs are most commonly used for share dealing, and they also provide access to exchange-traded funds, another type of stock investment, whereas spread betting forex is thought to be the most popular method of currency trading.
The main difference between spread betting and CFDs is the way that they are treated for taxation: spread betting is exempt from stamp duty, capital gains tax and commission charges*, whereas CFD traders are required to pay both capital gains tax and commission on their profits.

Read our article on spread betting vs CFDs for a full list of differences between the products. Spread betting is only available in the UK and Ireland, so if you are planning on opening trades within another region, you may want to consider forex CFDs.

As mentioned in this article, spread betting the forex markets involves the use of leverage, also called trading on margin. When opening a position, forex spread betters are only required to place a fraction of the full trade value as their deposit. This provides them with better exposure to the markets.
However, forex leverage comes with many risks that all traders should prepare for beforehand. Spread betting forex on leveraged positions will calculate losses at full trade value, meaning that while profits can be magnified if the markets move in your favour, there is the chance of losing all your capital if the markets move in the opposite direction.

You may also have to pay spread betting holding costs, depending on the assets and how long your positions last. In some cases, these costs can even succeed the profits made on your account; therefore, it is important that you deposit a sufficient amount of funds in your account to cover any holding costs.

Read more about the risks of spread betting forex here, including leverage, holding costs and account close-outs.

At CMC Markets, our forex traders often choose to practise with virtual funds on a demo account before depositing live funds, in order to familiarise themselves with the market. Opening a forex demo account is a simple process and will give you the opportunity to practise your forex spread betting strategies with £10,000 worth of virtual currency.

It is important to find a forex spread betting platform that is suitable for your trading plan. Our online trading platform , Next Generation, is an award-winning system that caters for traders of all experience levels.

If you are a remote trader, our platform is available when trading from home , thanks to our advanced mobile technology. Our forex spread betting platform is also suitable for traders on-the-go, whether you prefer to trade on a mobile or tablet device. Learn more about mobile trading apps .

Forex spread betting forums can be useful for sharing trading strategies and market news and analysis with other traders. This is a form of social trading and can be especially useful for beginner traders in order to learn about financial trends and patterns from our key market analysts. Our platform comes with a built-in spread betting trading forum for both desktop and mobile devices.

Experience a more rewarding way to trade, with access to reduced spreads of up to 28.6% through our tiered-volume fee discount scheme.

Save from 5% to 28.6% on spreads with our tiered-volume fee discount scheme.

Stay informed with global market news thanks to a free subscription on us when you sign up to CMC Alpha .

See our full product listing, entry trading point requirements and spread discounts.

In forex trading, the spread is the difference between the bid and ask prices of a currency pair. The bid price ref
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