Spread betting

Spread betting is a straightforward and tax-efficient way of leveraging the financial markets.

Spread betting is a straightforward and tax-efficient way of leveraging the financial markets.

The spread-betting company predicts where a price or score of anything from a share to a commodity to a cricket game will stand at a specified time in the future. The prediction takes the form of a spread – the range between the low and high estimates. You then bet on those prices, 'buying' at the high price if you think the price will rise from current levels and 'selling' at the low price if you believe it will fall.

Spread-betting profits count as gambling wins, so they aren't liable for capital gains tax. However, spread-betting losses – which can be high – cannot be set against other gains to reduce tax.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up