Where do I start with spread betting?
You can apply online at any of the spread betting companies listed on FortuneSpreads. Alternatively, you can send an application by post.
If you're not familiar with the basics of spread betting, you'll find it all summed up in our beginner's section.
Can I only spread bet from the UK?
Do I have to deposit to open an account?
Opening an account does not require a deposit – you will be able to deposit at a later stage once your account is set up. Many companies offer demo spread betting accounts that allow you to practice with virtual currency.
If you apply online, you will be set up within minutes. If you apply by post then this could take several days or longer. All spread betting companies are required to check the financial security of their customers before accepting an application; depending on your situation, this can cause a small delay.
How secure are my deposits?
All spread betting companies in the UK are regulated by the FSA. The FSA requires these companies to segregate their retail funds from any other type of funds. This means that in the event of a company default, your finances are secure and will not be treated as a recoverable asset by creditors.
This is only true for customers categorised as retail; the spread betting company that you choose to deposit in should make it clear what category you are in.
The Financial Services Compensation Scheme (FSCS) will also cover customers up to an amount of £50,000. This compensation scheme is applicable to all authorised financial services firms in the event of their insolvency.
What are the risks of spread betting?
Spread betting can lead to financial losses that exceed your initial deposit. To avoid these risks, please read our guide to stop losses and the precautions you should take when spread betting here.
Spread betting companies make the majority of their money through the spread. All firms will hedge against their clients to minimise risk; but in some cases a company will not hedge a client's bet if they feel that the bet is misjudged. By not hedging against certain bets, the spread betting company is able to take greater margins.
Are spread betting winnings taxed?
Spread betting earnings are exempt from tax. They do not contribute towards capital gains, which means that they cannot be written off as losses either.
Who can open a spread betting account?
Anyone over the age of 18 in the UK can set up a spread betting account. If you are outside of the UK and/or your financial savings or income is not considered high enough then you may be denied an application.
Do spread betting companies take a commission?
Spread betting companies do not take a commission on trades placed. This, and the tax-exempt status of spread betting are two of the many benefits that this type of trading has.