The Top 5 Spread Betting Brokers

Spread play involves placing a speculative bet on the price movement of a security based on the bid and offer prices (spread) offered by the spread punt broker, without taking any position in that security.

These are the top spread betting brokers, who offer spread punt across multiple asset classes of indices, shares, forex, commodities, and even bitcoin.

For example, a broker-offered bid and ask for a security are $100 and $105, and an investor believes that the price will fall. He bets $5 per inconsequential in reference to. If his prediction comes true and the price goes down to $90, he profits by $50 [($100-$90)*$5]. But if his prediction is incorrect and cost rises to $115, he will lose $75. (Related: Investopedia explains Spread Betting)

Traders should note that spread betting is illegal in several countries including the U.S., Japan, and Australia for a hundred of reasons, including its classification as online gambling, significant leverage exposure, the availability of derivatives exchanges, and no tax rules on spread risk profits. It remains legal and regulated in the U.K. and a few European countries. The U.K. even offers a tax break on spread betting profit and the spread put market remains concentrated in the U.K.

• IG: One of the largest spread brokerage firms based in the U.K. for the last 40 years and regulated by the Monetary Conduct Authority (FCA), IG claims to be the market leader with 126,000 active global traders and 41% of the U.K. market deal. It offers trading across 10,000 global markets. Backed by a high-end technology platform with claims of 0.1-second calling execution, IG offers free real-time news, advanced charts, free mobile apps for trading, and even integration of drug’s own front-end technology with IG APIs and terminals. Minimum stake is 50p per point with the daily spread and margin diverging with different contracts.
• Finspreads: Owned by City Index Ltd., which has been around for 29 years, Finspreads was a trigger in offering a browser-based trading platform in 1999. Complying with the planned changes by the European Union and the G20, Finspreads suggests centrally-cleared trades through LCH. Clearnet, a European based independent clearinghouse that serves major international stock exchanges, for client money protection. Spread betting starts with 10p per point, with tight spreads (from 0.4 points) and low boundary lines (from 1%) varying per the underlying assets available across 12,000 global markets. Along with unusual account types to suit client needs, Finspreads also offers mobile trading apps, charting decorates, watch lists, streaming news, and market profile views.