Spread betting enables you to speculate on whether an asset’s price will rise or fall without owning the asset. You can go long (buy) if you expect the price to increase or go short (sell) if you expect it to decrease. With spread betting, you choose your stake per point, meaning your profit or loss depends on how many points the market moves in your favour or against you. This makes spread betting a flexible way to gain exposure to markets. 

Yes, spread betting is legal in the UK and is regulated by the Financial Conduct Authority (FCA). This means there are rules in place to protect you as a trader, though you still need to understand the risks involved.

Spread betting carries a high level of risk. Your potential profits and losses are amplified through leverage, which lets you control larger positions with a smaller initial deposit. Because markets can move quickly, you may incur significant losses if you don’t apply effective risk management. In accordance with regulatory rules, Pepperstone provides retail client negative balance protection, ensuring you cannot lose more than your account balance.

Overnight fees (also called overnight funding or swap charges) are interest costs you pay when holding spread betting positions open past 10 pm UK time. They depend on the market, your position (long or short), and they are available on the product details or deal ticket on your selected platform. 

Imagine you think the FTSE 100 index will rise. You open a buy (long) position with a stake of £10 per point. This means you’ll gain or lose £10 for every point the FTSE 100 moves in either direction. If the index increases by 50 points, you make a £500 profit (50 × £10). However, if the index falls by 50 points, you incur a £500 loss.  

To place a spread bet, start by choosing the market you want to trade. Next, decide on your position: if you expect the price to rise, open a long (buy) position; if you expect it to fall, open a short (sell) position. Then, enter your stake, which determines how much you risk per point of movement. Before confirming your bet, you can review an estimate of your potential profit or loss in the order placement window, along with any margin requirements. Remember, spread betting involves leverage and carries a high level of risk, so it’s important to use appropriate risk management.