A spread betting ticket does not ask you for lots. It asks how many pounds per point you want to stake. Buy the FTSE 100 at 8,120 for £5 a point, watch it print 8,150, and the position is worth £150. Same directional exposure a CFD would give you, expressed in a unit that reads like a wager rather than a contract.
That wording is not decoration. In the UK, financial spread betting is legally structured as a bet, which is why profits sit outside capital gains tax for most private clients, and why losses cannot be offset against gains either. HM Revenue and Customs decides that treatment on the facts of the individual, not on the broker's marketing, so anyone trading full time as their main income should take proper tax advice rather than assume the wrapper protects them.
Stake per point, and why the sizing feels different
A CFD position is sized in units of the underlying: 0.5 lots of EURUSD, 100 shares of a stock, two contracts of an index. A spread bet is sized in currency per point of movement. On EURUSD a point is usually the fourth decimal, so £1 per point on a 30 point move returns £30. On an index, a point is one index point. On a share, it is normally one penny or one cent.
The practical effect is that risk arithmetic gets shorter. If your stop is 40 points away and you are willing to lose £200 on the trade, you stake £5 a point. No lot conversion, no contract size lookup, no worrying that the quote currency is not your account currency. Traders coming from a position size calculator habit often find they stop needing one. That convenience cuts both ways: because staking feels small, people size up without noticing that a £10 per point index bet carries the same exposure as a fairly large futures position.
Margin works the same way it does everywhere else. The platform holds a percentage of notional, and the same margin call mechanics apply when equity falls toward the requirement. Leverage is the amplifier in both wrappers, and the ESMA-era caps that the FCA adopted for retail clients apply to spread bets and CFDs alike: the same 30:1 ceiling on major currency pairs, the same tighter limits on indices, gold, individual shares and crypto, plus mandatory negative balance protection and the standardised loss-percentage warning on every UK provider's homepage.
Where the platforms actually differ
Most UK providers run both products from one back end. The price feed, the dealing desk, the risk book and the mobile app are shared. What changes between the two account types is the ticket, the statement wording, and the tax treatment.
| Spread bet | CFD | |
|---|---|---|
| Position size | Currency per point | Lots, contracts or shares |
| Base currency risk | Stake is in your account currency | P&L converts from the instrument currency |
| UK tax framing | Treated as a bet, no stamp duty, no CGT for most private clients | Subject to CGT, losses can be offset |
| Availability | UK and Ireland | Most non-US jurisdictions |
| Costs | Usually baked into a wider spread | Spread plus commission on shares, tighter raw pricing available |
Cost structure is the one that decides which account an active trader should hold. Spread betting is nearly always spread-only, and that spread is wider than an equivalent raw feed. A professional trading size in a share CFD with a commission model will usually pay less per round turn. A swing trader placing four trades a month cares far more about the tax line than about a fraction of a point on entry.
Financing, dividends and expiry
Daily funded bets roll overnight and charge or pay financing exactly like a CFD swap, usually quoted as a benchmark rate plus a spread on the notional value. Long index positions receive dividend adjustments when a constituent goes ex-dividend and shorts pay them, net of no withholding since a bet has no underlying ownership. Quarterly bets bundle the financing into a wider quoted spread and expire on a set date, which suits a position you intend to hold for months without a nightly debit.
The financing charge is the quiet killer of long-held leveraged positions. On a bet held for six months, the accumulated overnight charges can exceed the spread you spent entering by a wide margin. Check the daily rate before you assume a wrapper is cheap.
What to check before opening an account
The regulatory question is the first one. Spread betting is a regulated investment activity in the UK, so the provider must be authorised by the FCA, and you can confirm the entity number on the public register in under a minute. Our guide on how to check a broker license covers the trap of a group that markets under one brand and onboards you into an offshore entity with different protections. UK-authorised clients get client money segregation and FSCS cover within the scheme limits. An offshore sister entity gives you neither.
After that, the checks are the ordinary broker checks. Look at how the provider prices around news: many spread betting firms widen aggressively into an economic release, and a stop sitting inside the widened band gets filled at a price you did not plan for. Look at whether guaranteed stops are offered and what the premium costs, because that is the only order type that survives a weekend gap at the level you asked for. Look at whether the platform gives you real charting or a stripped-down mobile ticket, since plenty of spread betting apps route serious analysis out to TradingView and keep only execution in house.
Who the wrapper suits, and who it does not
For a UK-resident retail trader running modest size on indices and currencies, spread betting is the simpler product and the tax framing is a genuine advantage. For anyone outside the UK and Ireland, the question does not arise, because the product is not offered. For a trader who wants tight commission-based pricing on equities, or who needs positions denominated in units that match a hedge elsewhere in a portfolio, the CFD account is the right tool and the spread bet is the wrong one.
Prop firm traders should note a separate point: firm evaluations are simulated accounts running CFD or futures instruments, not spread bets, so the sizing habits you build staking per point do not transfer directly. You will be back to lots. Whichever wrapper you use, leveraged trading carries a high risk of loss and most retail accounts lose money on it.
"Spread betting and CFDs are the same trade wearing different paperwork. Pick the one whose tax and account rules suit you, then judge the broker on execution, not on which wrapper it markets harder."
— Alex Onta, Executive Director, SINGUARD
Key Takeaways
- A spread bet and a CFD give the same directional exposure; the difference is the sizing unit and the tax treatment, not the market risk.
- Positions are staked in currency per point, which removes the lot and conversion arithmetic but makes it easy to size up without noticing.
- FCA leverage caps, negative balance protection and the standard risk warning apply to spread bets exactly as they do to CFDs.
- Spread betting is spread-only pricing, so heavy traders in shares usually pay less on a commission-based CFD account.
Frequently Asked Questions
Is spread betting the same as CFD trading?
The market exposure is effectively the same and most UK providers run both from one price feed. The differences are that a spread bet is sized in currency per point rather than in lots or shares, and that UK tax law treats it as a bet rather than as a disposal of an asset.
Why is spread betting only available in the UK and Ireland?
The product depends on a domestic legal and tax framework that treats a financial bet differently from a contract for difference. Other jurisdictions have no equivalent category, so brokers there offer CFDs, futures or cash instruments instead.
Do spread betting accounts have leverage limits?
Yes. UK retail clients get the same caps that apply to CFDs, including 30:1 on major currency pairs and lower limits on indices, commodities, shares and crypto, together with negative balance protection. Professional-client status changes those limits and removes some protections.
About the Author
Alex Onta is an Executive Director at SINGUARD. He built eTrader, the terminal, the mobile apps, eTrader Broker, Copytrading, Business and Community, along with the worldwide clustered-server infrastructure it all runs on, with his brother Roman Onta helping on the design, and he leads that division today. Together with Roman he builds the Prop Firm CRM, the Broker CRM, Scalegram and CopySignals, and the two of them carry worldwide compliance, payment processing and international business structuring side by side. He lives and works in Dubai for most of the year. Meet the executive duo leading Singuard's five divisions.