Top bookies for spread betting in the UK
Spread bets are fantastic wagers that you can place on all kinds of financial movements. It could be share prices, gold prices or even the amount of goals scored in a particular football match. The options are vast and varied and will certainly appeal to those who enjoy a diverse betting experience.
And if you are interested in the sports betting side of spread bets, then you’ll need a top bookies that is happy to offer this form of entertainment.
But not every site is worth dealing with. And our years of experience have taught us not to simply go with the first option available. The sites that you see on this page are all carefully selected and evaluated by our review team. They know exactly what to look out for and when something may not be up to scratch.
When you see a brand that you like, you’ll find the basic site info along with any bonus news right there in our listings. You can see exactly what is in store for you when you click through to that website and create an account.
How does spread betting work?
So what is spread betting? Financial and sports spread betting explained in a simple format shouldn’t cause you too many headaches. It is an easy way of accessing financial investments without needing a broker, years of experience or even tons of money.
As an investor, you are deciding which way you think a price will go. This may be a commodity such as oil, for example. Or it could be a price comparison between two foreign currencies such as EUR and USD.
And in a sporting sense, it could be your prediction of how many corners there may be in a football match, for instance. The possibilities are almost endless and provide a huge amount of investment options. We’ll walk you through the ins and outs of sporting spreads a little later on.
In regular financial investments, you usually have to buy into a stock and hope that the price goes up over time. But spread bets can speculate on the price going down as well. This is known as shorting the market or going short.
If you think the price will rise, then you are said to be taking a long position with an investment.
A spread bet consists of three parts
So spread bets are a little different to regular investments. It is essentially gambling rather than purchasing shares or something similar. You just need to decide what your position is—i.e., will the end result be more or less than it is now.
But to create a spread bet, you will need to consider three main components.
The spread
What does spread mean in betting? This is something our readers ask us time and time again. At first glance, the concept of a spread can seem a little confusing. However, a spread is little more than the difference between a buy price and a sell price.
Let’s elaborate a little more.
When you begin a financial spread bet, you are looking at the potential outcome of a price movement. And you will see two prices. The lower price is called the sell price and the higher price is called the buy price.
If you think that the price is going to increase over time, then you buy into a trade at the buy price. And if you think the price will go down, then you take the sale price.
The reason for this terminology is that when you think the price will decrease, you are selling the market and going short. And when you think the price will increase, you are buying the market and going long.
The difference between these two prices is known as the spread.
Now you know ‘what does the spread mean in betting’ you’re probably asking ‘what is the point of the spread?’ Now that is the easy part! It is how the broker can collect a profit on each trade. Rather than charging a commission, they place two different numbers to create the spread.
The true value of your investment starts in the middle of those two numbers. So before you can think about making any profit, the price has to shift up or down slightly for you to get there. The broker will make a small profit as this happens.
The bet size
The size of your wager when betting the spread makes a huge difference when talking about spreads. The value of a stock, for example, will increase or decrease in increments, or pips as they are known. This will be a percentage of a decimal point in the increase or decrease in price. How much you choose to risk is up to you.
And each time the price moves on one further increment, you will either lose more money or make more money as a result.
The broker or bookie calculates potential wins or losses by multiplying the point increase or decrease since the investment started by your initial wager.
If you go long and the price shoots up, then you are quids in. But if you go long and the price goes down, then you could lose a substantial amount of money.
However, before you panic and start to worry that there’s a risk of losing all your cash, there are certain tools that you can use to automatically get out of an investment if it starts going against you. And don’t forget, you can always physically cash out if you don’t like how the market is moving.
The bet duration
Spread bets are often a lot shorter in duration than other types of investments. When you invest in regular shares, for example, you are hoping that the price will rise over a number of months or years. These are long-term investments and don’t require your monitoring on a daily basis.
But spread bets are a little different and rely on constant fluctuation in the market for the punter to see some action. Currency pairs and stock prices jostle for position throughout the day as the markets are open. And most spread trades will take place between the start and close of a market.
Leaving this kind of investment overnight while you are not keeping an eye on it can have extremely good or extremely bad results. While there are tools available, as we mentioned, to get you out of a trade, there is still a chance that losses can be heavier than you originally bargained for.
A simple example
Price changes in stock price or between currencies all move in pips. These are the small increments that show the shift in price—up or down.
A pip, or Percentage in Points, is 1 hundredth of 1 percent. Some trades are based on 1 pip movements, such as Forex. But shares may move in 10 pip jumps as the price change is more aggressive.
But for this example, let’s assume that we’re betting on an imaginary stock with a current value of £101. And the pip is a £1 price move.
The spread might be as follows: £100 / £102.
A short bet would sell the market at £100 and a long bet would buy the market at £102.
Example: If a punter has a long position with a wager of £1 at a market price of £102 and the price goes up to £103, then they benefit from a 1 pip increase. 1 pip = 1 x £1 profit.
How spread betting started
Spread bets emerged as an official concept in the UK in 1974. Trading in gold wasn’t possible for regular traders and so Stuart Wheeler, a banker with a love for gambling, developed the idea of speculation on the price changes without actually purchasing the stock.
IG Index is now a huge company with millions of customers on its books. Creating the idea of a spread between the two prices creates the ability for a broker to remove commissions and earn money on the price changes themselves.
A stock trade vs. a spread bet
There are several differences between trading in stocks and shares and spread bets.
Here is a brief rundown of how each one works in comparison.
The spread bet
A spread bet is a tax-free betting product. This isn’t true in every country in the world, but certainly, in the UK it is.
It is even outlawed in some countries such as the USA, for example. In general, internet gambling is not permitted in the states unless a special licence is in place for an operator to offer their services.
Spread bets speculate on the price going up or down. So this means that a punter doesn’t have to only hope that a price goes up over time.
Spreads are generally very short trades. Most people get in and out within a number of minutes or hours rather than leaving an investment for days or years.
It is also far more accessible for everyday investors. You don’t need a broker and there are many apps that allow you to take part that are simple to understand.
The stock trade
Stock trades rely on your position being matched by someone with the alternate position. So your broker will need to sell your shares to somebody else before you realise the money from the sale.
If you were to purchase a share investment, then you are physically taking hold of a small part of that company. You will usually receive a dividend for your investment throughout the years.
This is also an important aspect to consider when buying into a regular share trade. However, there is no such payment for a spread bet and those customers must purely rely on the price going up or down.
Conclusion
Spread bets are far easier for regular punters to have a flutter. The user interface for the technology involved is much simpler and it’s very fast to begin seeing profits and losses.
If you have the time to monitor your trades and are excited by the prospect of jumping in and out of an investment very quickly, then spread bets are a potentially profitable and probably more exciting opportunity.
Spread betting pros
Here, we take a look at a rundown of the pros and cons of spread trading. There are many reasons to try your hand at this type of gambling. But remember, your investment may go up or down at any point. You should, therefore, only play with cash that you don’t need for everyday essentials.
You don’t pay tax on profits
As spread bets are a form of gambling, you do not have to pay any income tax or capital gains tax on the profits. However, this also means that you cannot offset any losses against your other income for tax purposes.
In some countries such as Spain, for example, there is a hefty amount of tax to pay on spread bet profits. So if you are considering playing in another country, then you need to check out the taxation rules before you start.
It’s possible to gain profit in a falling market
Making a profit on a falling market is an exciting prospect. You don’t have to wait all day for a price to go upwards if you don’t want to. If you have a strong belief that it will go down, then you can jump straight in and benefit from that market price devaluing.
No large investments needed
When you start a spread bet, you need to consider two financial criteria. This is the amount you wish to gamble with and also the size of the deposit that you will need.
Regardless of the amount that you wager, a broker will need you to back your position with a little collateral. This is called your margin. It is usually a small percentage of the total amount you stand to win or lose.
And trades can begin with very small margins and very small bets up front. You could play for just a few quid here and there without risking a huge amount of money.
One account gives you access to different markets
Spread bets occur across a range of different markets. This could be sports and other financial markets as well.
Both types offer many different aspects on which you can place a spread bet. Financial markets include shares, commodities, foreign exchange and others. Sports spreads involve match winners, goal scorers and hundreds of other types as well.
Spread betting cons
And now we will take a look at some of the downsides of investing in this way. You always need to take the disadvantages into consideration before parting with your cash, regardless of the type of bet you are placing.
High risk and volatility
The value of any financial indices can go up and down throughout the day. And if you have chosen the wrong position when you begin your bet, then you will lose some money. You can always wait it out and hope the price goes back up. But this gives room for further losses as the price may continue to fall.
Fluctuating markets present fabulous options for investors. But they are far more volatile than simple share sales where you can buy at one price and leave them for a number of years as the price goes up and down over time. This is seen as a way of investing your money a little more safely than with spread bets.
You can lose money quickly
Losing your cash quickly is never an ideal situation. However, it is possible to cash out of a deal at any time. If you see your stock heading south, then you can cancel the order and simply take a small loss.
But if you don’t happen to be sitting in front of your computer screen watching the price shifts, then it’s possible that the value will plummet without you knowing anything about it. For this reason, there are certain tools in place such as stop loss that we will take a look at in a moment.
Not a long-term strategy
Spread bets are usually a day trade. Most people will be in and out in hours when it comes to placing this type of bet.
Leaving a position open overnight turns into more of a long-term investment and is better suited for those who are more comfortable with a long-term trade such as purchasing shares, for instance.
Managing risk when spread betting
It’s essential to know exactly how your money is doing at any given point during the day. Spread bets change value frantically from one minute to the next so you’ve got to have nerves of steel and be fairly confident with what you’re doing. This includes keeping an eye on the markets and seeing where they are likely to go in the very near future.
Stop-loss
But we don’t always have time to keep an eye on every single trade at every minute of the day. For this reason, stop losses exist and they are a very valuable tool for traders.
When you begin a trade, you can decide what is the lowest point that you will go to with that investment. If the price starts going against you, then you know that you will only limit your losses to a fixed amount. It’s a kind of free insurance policy against any potential catastrophe.
Assets most often used for spread betting
In the financial markets, there are several different things that you can bet on. Anything that has a value that goes up or down or can be compared to something else and a value created between the two is possible to enjoy with a spread bet.
Forex (Currencies)
Foreign currencies are one of those trades that need to have a comparison. US dollars and Euros, for example, will have their value derived from how strong one is against the other. From here, a spread is available for you to bet on.
As one currency grows stronger against the other, the price will change throughout the day and spread bettors will see their profits rise and fall as a result.
Shares
Company shares appear on various markets around the world. Their value is broken up into small pieces and sold to investors. The share price appears on an index such as the S&P 500 or FTSE 100, among many others.
The value of these shares will move around from hour to hour. And as the value moves, so too will the opportunities to make a profit or loss from the prices.
Indices
Indices track the value of various company share prices. The S&P 500 is just one of those. This stock market index tracks the performance of 500 companies in the United States. The value of the overall index will rise and fall depending on the performance of the companies.
You can bet on the fluctuations in the value of that index price as it moves throughout the trading hours.
Commodities
Spread bets all began with the inability to trade gold around 50 years ago in the UK. Commodities like this are now incredibly popular and attract a lot of attention.
The most popular commodity that punters bet on is crude oil. The price of a barrel of oil gets the trade floor pumping every time.
Items such as cotton, silver and various others all offer the chance to speculate on market prices for a spread bet.
Spread betting on sports
Placing a spread bet on a sports match is slightly different to financial markets. There isn’t a specific value of a product going up or down with this type of betting. Instead, you are largely betting on the outcome of a match or various events that happen within the game.
So to make it easy for you to get a grasp on these wagers, here’s our quick guide to sports betting spread explained.
Regular sports betting involves fixed odds which allows the punter to make a profit from correctly predicting results. When they win, the bookies lose. And when the opposite happens, the bookies have a good day.
While fixed odds pay a specific amount of cash depending on your wager, a spread bet on a sports match offers you the same great advantage that a financial spread does. You can continue to win more and more cash if the result far exceeds your expectations.
Points spread explained
In some sports, point spread betting is used. This is especially true in games in the NFL, for instance.
This is where it is helpful to have betting lines explained.
Betting lines add a bit of extra excitement when one team is far stronger than the other. This type of bet uses a point system to give the stronger team a handicap.
One team may begin on -5 points before the game. This means that they must overcome this deficit to break even in the eyes of the bet.
It makes games between two vastly different outfits far more enjoyable to watch and place bets on.
American Football
Super Bowl spread betting uses the points-based system for many of its spreads and not just the overall score.
There are a couple of popular bet lines available for fans of this type of betting.
Firstly, we have the moneyline bet. The stronger team would have a -110, for example. This means that you would have to bet £110 to see a £100 win if you think the favourite will win.
In addition, we have the total bet that will pay out depending on the number of points in the game.
Basketball
NBA spread betting, college basketball and other national basketball leagues have loads of betting opportunities available for fans. Bets tend to go much further than some other sports such as NFL spread betting, for example.
Much of the betting action takes place on points, tackles, quarter and half leaders. Naturally, it’s possible to place your bets on the overall winner but there’s far more action available throughout the game.
Point systems are also used to help mismatched opponents and create moneyline bets etc.
Soccer
Soccer spread betting In the UK is very popular. Gone are the days of only having fixed odds available.
Spreads are offered on a range of different markets. This might be for match winners, goals scored, corners, yellow cards and all manner of other possible outcomes.
How does spread work in football?
Let’s take a look at an example of one of the most popular football spread betting markets.
The total number of goals in a game between Man United and Liverpool may have an estimate of 2.5. This would mean that the betting site looked at the historical averages of these games and decided that this is the statistical number of goals likely.
But obviously, it isn’t possible to score 2.5 goals. Therefore, the spread may be 2.3 / 2.7.
Going long on this bet would mean that anything over three goals gets you a multiplier of your stake. For example, 5 goals will give you 3x your stake as a profit. But 2 goals means a 1x loss.
Tennis
Tennis matches attract a lot of attention from spread bettors. There are several different elements within a match that lend themselves perfectly to the tennis spread betting experience.
Bookies use point systems to create possible spreads with the number of games that players win or lose as well as the number of sets. It’s also possible to speculate on the number of aces and double faults as well.
FAQ
Here are a few of the most frequent questions that we come across when looking at the subject of spread bets.
