If you’ve been browsing through forex & CFD related websites, especially in the UK, you may have come across the term spread betting. The idea of spread betting often raises several questions from our clients: What exactly is spread betting? What is the difference is between spread betting and traditional CFD and FX trading?

What is Spread Betting & How Does it Differ from Forex & CFD Trading?

If you are a resident of the United Kingdom, then you have the unique ability to open up a spread betting account. On paper there is no difference in functionality between a forex / CFD trading account and a spread betting account. The main difference is financial.

United Kingdom residents who open a spread betting account do not have to pay taxes on profits. A simple definition of spread betting would then be forex & CFD trading without the need to pay taxes. It’s worth emphasizing that everything else in a spread betting account remains the same: margin, leverage, available pairs for trading and the software as just a few examples.

Limitations of Forex & CFD Spread Betting

Now that we’ve covered the definition of spread betting, it’s worth exploring some of its limitations. Spread betting is a service limited to residents of the United Kingdom. Our team has performed research on this topic and have yet to discover another country in the world offering a service similar to spread betting. This means that you cannot participate in spread betting unless you have residency in the United Kingdom.

As a final thought, spread betting can also apply to the non-forex & CFD markets as well. For example, it’s possible to open a spread betting account to place wagers on sporting or political events. From our perspective, the largest share of spread betting accounts are in the forex & CFD market.

Forex Consultation Services – Guidance in Selecting the Best Forex, CFD, and Spread Betting Broker

We hope you found our definition of spread betting useful. If you are interested in trading forex & CFDs, we can assist you in finding the most trustworthy and reliable brokers in the marketplace. Additionally, we can also recommend some spread betting firms to consider trading with as well. We look forward to hearing from you!