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Hargreaves Lansdown

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% of retail investor accounts lose money when trading spread bets and 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.

How to Spread Bet

The concept of Spread Betting is simple. If you think a market is set to rise you 'buy' or if you think the market will fall you 'sell'. The difference between the sell price (bid) and buy price (offer) is known as the 'spread'.

When you deal you are not physically buying shares, but instead taking a position on whether a price will rise or fall. Your position is a bet and therefore free from Capital Gains Tax* and UK Stamp Duty*.

Key features of Spread Betting

  • Profits from financial Spread Betting are free of tax*.
  • There is no commission to pay - just the dealing spreads.
  • Go long or short. You can go long (buy) if you believe market prices will rise, or go short (sell) if you believe market prices will fall.
  • Access thousands of markets from one account. Including: global indices, individual shares, FX and commodities such as crude oil and precious metals. You can also trade: sectors, bonds, options, and many more.
  • You can open positions without putting up the full transaction value; gain large exposure by putting down a small initial deposit.
  • 24 hour trading. Many markets are available even when the underlying market is closed. The service offers a number of 24-hour quotes on stock indices, giving you the freedom to deal whenever it suits you.
  • Stop losses and market orders to limit your risk. For a small premium, guaranteed stops allow you to put an absolute limit on your risk without affecting your potential profits.

Our examples provide more detail to help demonstrate how Spread Betting works in practice.

These examples are simplified explanations of how to spread bet, and there are other factors to consider, including measures to help place a cap on any potential loss you may make. Before you begin, you can also take steps to become better informed about Spread Betting markets by watching our Introduction to Spread Betting tutorial.

Pounds per point

There is one crucial way in which Spread Betting differs from conventional share trading. Instead of buying a quantity of shares you simply decide how much money you would like to bet per point. For UK shares, each point is equivalent to a one penny movement in the share-price (or one cent for US shares, and one euro-cent for European shares).

For indices, each point is equivalent to a 1 point movement in the quoted price for the index. For example, if the UK 100 index moved from 6000 to 6001, it would have moved by one point. See example.

Learn about risk

It is important to understand the risks involved before you begin. This is because, as Spread Betting is a leveraged product, it can result in losses which exceed your initial outlay. Find out more about the types of risk and how you can use effective risk management tools to help manage them. Or if you're ready to start Spread Betting now, you can open an account online in minutes.

*This depends on individual circumstances and may be subject to change in the future. Tax laws may differ in a jurisdiction other than the UK.

Open a Spread Betting account

Important information

Spread Betting and CFD trading carry a high level of risk to your capital; you should ensure you understand the risks involved. Please read the full risk warning.

Why HL Markets?

  • Award-winning platform
  • Access thousands of markets
  • Free education
  • Tight spreads

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