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Capitalise on rising and falling markets with a tax-free* alternative to conventional trading
Financial spread bets are derivative products that enable you to speculate on the price of a financial instrument, like a share, stock index or commodity.
The more the price moves in your favour, the greater your profit. The more the market moves against you, the greater your loss.
You take a position by betting a certain amount per point of movement. Crucially, you never need to own the underlying asset, and because you’re betting on a direction there’s the potential to profit from both rising and falling markets. However, you should be aware that there is also the potential to lose more than your initial deposit should the market move against you.
Betting on a price increase is referred to as ‘buying’, or ‘going long’, while betting that it will fall is ‘selling’, or ‘going short’.
Spread betting allows you to bet on falling as well as rising markets – providing opportunity in all conditions.
Spread betting is a leveraged product, which enables you to deal without putting up the full value of the position. Remember, though, that leverage also adds to your risk.
Any profits you make won’t be subject to capital gains tax. Spread betting is also exempt from stamp duty.
Spread betting offers round-the-clock dealing opportunities on markets such as forex and major stock indices, even if the underlying market is closed.
Any financial product comes with risk attached – you can lose money if the market turns against you. It's important to note that, as spread betting is a leveraged product, the associated risks can be greater.
Leverage enables you to gain exposure to a financial market while only putting up a comparatively small amount of money.
While you only need a fraction of the value of the position to open a deal, any profit or loss is based on its full value – so both can be magnified in comparison to the amount you initially deposit. Without due care and responsible risk management, it’s possible to amass substantial losses in a short space of time. This is particularly true if the market jumps suddenly, or ‘gaps’, in response to an unexpected event.
‘Slippage’ is the term used to describe what happens when it is not possible to fill an order at the precise level that was originally specified. Slippage can occur for a variety of reasons, including:
When executing a trade with IG using current live prices, we guarantee we will never subject you to slippage i.e. we will never complete your request at a worse price than when you clicked on the deal ticket. Instead, if the market moves against you, we'll ask you to resubmit your order rather than filling it at a price you don't want.
IG clients can also use a guaranteed stop on closing orders attached to existing positions in order to avoid slippage. The order you place to exit your position is guaranteed to be filled exactly where you specify, no matter what occurs in the underlying market. Please note there is an additional charge applied for this service.
It is worth noting that slippage can also result in orders being filled at more advantageous levels than originally specified. If the market moves in your favour, you may be eligible to be filled at a more favourable level. At IG, this ‘positive slippage’ is available to clients across all product groups when placing orders and when dealing on live prices – this is called price improvement.
New clients can deal with reduced minimum bet sizes for two weeks through our introduction programme.
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Our easy-to-apply automated risk management tools are designed to save you time and offer a level of security.
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If you already actively trade the financial markets, spread betting is an alternative way to take advantage of price movements, without having to buy the underlying asset
The risks involved mean spread betting isn’t suitable for everyone, but it generally attracts:
*Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.