In short
- Profit/loss = stake per point × points moved.
- Margin at 30:1 = 3.33% of your exposure.
- Daily bets pay overnight financing; futures bets build it into a wider spread.
The basics
When you spread bet, you decide whether a market will rise (buy, or "go long") or fall (sell, or "go short"), and how much to stake per point of movement. The broker quotes a sell and buy price; the difference is the spread, which is how the broker earns its money.
Worked example: buying GBP/USD
- Quote: 1.27100 / 1.27109 (spread 0.9 points)
- You buy at 1.27109 with a stake of £2 per point
- GBP/USD rises and you close at the sell price of 1.27609
Points gained: 1.27609 − 1.27109 = 0.0050 = 50 points. Profit: 50 × £2 = £100.
If instead the price fell and you closed at 1.26709, you'd lose 40 points × £2 = £80.
How much margin you need
Your exposure is stake × price in points. At 1.2711, GBP/USD is 12,711 points, so a £2 stake gives exposure of 2 × 12,711 = £25,422. With FCA retail leverage of 30:1 on major pairs, margin is 3.33%: about £847.
Daily bets vs futures bets
| Daily (rolling) bet | Futures (quarterly) bet | |
|---|---|---|
| Spread | Tighter | Wider |
| Overnight financing | Charged each night | Built into the price |
| Best for | Short-term trades | Positions held for weeks |
| Expiry | Rolls over automatically | Set expiry date |
Managing risk
- Stop-loss: closes your bet at a set level; may slip in fast markets.
- Guaranteed stop-loss: fixed exit price for a premium — see GSLO explained.
- Limit order: takes profit automatically at your target.
- Stake sizing: choose your stake so that hitting your stop costs a small, fixed share of your account.
Tax
For most UK residents, spread betting profits are free of Capital Gains Tax and stamp duty, and losses can't be offset. Compare with CFDs in spread betting vs CFDs.
Going short: profiting from a fall
Spread betting lets you sell first. Suppose EUR/GBP is quoted 0.85550 / 0.85558 and you sell at £3 per point at 0.85550. If it falls and you close by buying at 0.85250, you gain 30 points × £3 = £90. If it rises and you close at 0.85750, you lose 20 points × £3 = £60.
Overnight financing on daily bets
A daily bet held past the rollover is charged (or sometimes credited) financing based on your exposure, an interest-rate benchmark and the broker's mark-up. For example, an exposure of £25,000 with a 6% annual financing rate costs roughly £25,000 × 6% ÷ 365 ≈ £4.11 per night. Over several weeks, a futures bet with financing built into the spread may work out cheaper.
Choosing your stake
- Decide where your stop-loss belongs on the chart.
- Decide how much of your account you'll risk (for example 1%).
- Stake = money at risk ÷ stop distance in points.
Example: £4,000 account, 1% = £40, stop 25 points → stake £1.60 per point.
Spread betting checklist
- FCA-authorised provider
- Competitive spreads on the markets you trade
- Minimum stake small enough for your account
- Guaranteed stops available if you want them
- Clear information on financing and futures-bet expiries
Frequently asked questions
What is a point in forex spread betting?
At most brokers, one point on a major pair like GBP/USD equals one pip (0.0001). Check each broker's market information, as definitions can differ.
Can you lose more than you stake in spread betting?
Your loss isn't limited to your stake per point — it's stake × points moved. But FCA negative balance protection means retail clients can't lose more than the money in their account.
Is spread betting gambling?
It's regulated by the FCA as a financial product, but treated as betting for tax purposes, which is why profits are generally free of CGT.
What does spread betting mean in the UK?
Financial spread betting is a way to bet on price movements, staking a set amount per point. It's regulated by the FCA as a financial product and profits are generally free of CGT for UK residents.
CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading these products. You should consider whether you understand how they work and whether you can afford to take the high risk of losing your money.