FxBrokerReviews.org – Spread betting in the forex market is all about trading in the movements of the market. The investors do not buy the underlying asset but predict its movement in the forex market. They simply speculate on the rise and fall of the assets in the forex market, based on the market conditions.
The spread betting market uses the same functionality as CFDs trading, where the trader is not required to hold the stocks, commodities, or any other financial instrument to trade. More and more traders are inclined today toward spread betting due to the potential tax-free advantages it offers.
If you are planning to start your journey in spread betting, within this article we have mentioned the 6 best spread betting platforms for beginners as well as advanced traders. Keep reading below to know more about spread betting, how it works, and the best spread betting platforms.
Also read: Why Is Forex Spread Important And What Are The Best Forex Spread Trading Strategies?
Best spread betting platform 2022
After testing each platform, based on various factors like placing a bet, asset offerings, and a spread betting comparison of the fees charged by the forex brokers.
Here are our 5 best spread betting brokers.
1. IG – overall best spread trading platform
IG supports both advanced as well as new traders for spread betting. IG allows traders to spread bet on more than 18,000 markets. The platform only charges the spread when a position is opened. What is impressive about IG is that the spreads can be as low as 0.6 pips for FX trading and 0.1 points for shares.
The platform charges low trading fees and also offers tight spreads. IG has also secured a good position in terms of safety as it is a heavily regulated platform. It is policed by the FCA and BaFin. The platform also allows traders to spread betting through the MT4 trading platform, which is integrated with the forex broker.
Why Choose IG?
- Quality of educational resources and tutorials.
- Offers MT4 and Webtrader.
- Low trading fees and tight spreads.
- Has a user-friendly interface.
2. Pepperstone – best spread betting platform with competitive pricing
Pepperstone has a reputation for being one of the best spread betting brokers in the UK. The trading platform has earned a good name amongst the traders as it provides a variety of assets, charges low trading fees, and is a storehouse of educational resources and market information.
Pepperstone is also a top choice when it comes to low spreads. This is because it uses multiple top-tier liquidity providers and has competitive pricing as compared to other brokers. Traders can choose between a Standard account, which has no commission costs, and a Razor account, which provides the lowest spreads starting from 0.0 pips.
Why choose Pepperstone?
- It averages the lowest spreads for most currency pairs for spread betting.
- Has a wide range of assets to trade from.
- Supports trading platforms like MT4, MT5, and trading view.
- Highly regulated platform.
- Offers fast execution fees.
Also read: Pepperstone Broker Review 2022
3. FXCM – best CFD spread betting platform
FXCM is the best spread betting trading platform for CFDs. It allows trades to trade globally regardless of whether you prefer to use shares from Australia, the USA, The UK, or even Hong Kong, all the major stock markets are available.
The platform offers commission-free trading where users can spread bets on currencies, commodities, stocks, as well as indices. FXTM has an excellent customer support and can be contacted in several languages. For beginners, the platform offers a lot of educational tools, including a demo account and live webinars. The platform has tight spreads starting from 0.1 to 1.5 pips.
Why choose FXCM?
- Regulated by the Cyprus laws.
- Wide range of assets.
- Has an easy account opening process.
- Offers tight spreads as compared to other platforms.
- Supports an array of educational content for beginners.
Also read: FXCM Broker Review 2022
4. AvaTrade – best spread betting platform for beginners
Avatrade is regulated by the Central Bank of Ireland, ASIC, FSA, and FSCA and offers a high degree of protection. It is the best spread betting platform for beginners with no commission charges when you open trades. This trading platform is a good option for those who are new to the market and are concerned about the dramatic changes in spreads due to market volatility.
With +1,000 financial instruments and multiple trading platforms, the broker, certainly has a fair amount of spreads, suitable for most traders. The spreads start from 0.9 pips for highly-liquid pairs.
Why choose AvaTrade?
- The platform supports MT4 and MT5.
- Offers a wide range of trading assets.
- Heavily regulated platform.
- Easy for beginners to understand.
- Provides personal support through a relationship manager.
Also read: AvaTrade Broker Review 2022
5. Vantage Markets – best spread betting app
Vantage is an Australia-based forex broker that offers one of the best spread betting app in the UK. the platform offers up to 30:1 leverage when spread betting. It also uses an ECN spreads system, due to which the spreads are quite low. On specific instruments, the spreads can be as low as 0.0 pips.
The broker is heavily regulated by ASIC and the FCA. It offers commission-free trading on a wide range of assets, including over 44 forex pairs, CFDs, cryptocurrency, shares, commodities, and indices. The spread betting platform also supports third-party trading platforms like MT4, MT5, and a mobile app.
Why choose Vantage?
- Offers commission-free trading.
- Has tight spreads as low as 0.0 pips.
- Heavily regulated by the FCA and ASIC.
- Wide range of asset offerings.
- Supports MT4 and MT5.
6. City Index – best spread betting broker with low trading fees
City Index has a stellar reputation as the best spread betting trading space. The platform is listed on the NASDAQ and is regulated by the FCA. The platform provides more than 8,500 markets to trade. The forex broker offers fast execution speeds, with commission-free trading.
The spreads are an average of below 1 pip for the most popular currency pairs. City Index offers a suite of trading tools, including a newsfeed, economic calendar, and performance analytics.
Why choose City Index?
- A Regulated broker under the FCA.
- A wide variety of assets to trade from.
- Offers commission-free trading.
- Low minimum deposit.
What is spread betting?
Spread betting involves trading in market directions. In spread betting, traders do not own any asset, they only speculate on the movement of the price. They monitor the rise and fall of the prices based on their experience and market trends.
Spread betting is different from the traditional trading where traders hold positions and buy and sell commodities and other financial instruments. It is somewhat similar to CFD trading, where traders place a bet on the movement of the price against the value of the underlying asset without having to buy it.
If the bet placed by the trader is accurate, the trader gains high returns, but if the speculation goes wrong, the trader may face losses.
What are the advantages of spread betting?
Spread betting has numerous advantages, take a look at some of the benefits that traders can use if you are planning to start with spread betting:
- Spread betting does not involve any commission. Therefore, the brokers do not charge any commissions from traders who are involved in the spread betting trade.
- For traders in the UK, spread betting is tax-efficient, it means that no stamp duty or capital gains tax is applied to the traders.
- Spread betting is open for all markets. It allows for speculation price movements in various markets including, forex, and stocks. indices, commodities, and even cryptocurrencies.
- As the traders do not own the asset, they can either choose to go short (sell bet) or go long (buy bet), considering the market’s direction.
- The biggest advantage of spread betting is that traders can not lose more than what they have deposited with the broker and their money is also secured.
What is the difference between Spread Betting and CFD Trading?
Spread betting, and CFD trading, are very similar as both financial instruments speculate the price movements without owning the actual asset. But there are some key differences to be aware of. Read below the difference between both the instruments:
- Spread Betting – The main difference between spread betting and CFD trading is the way they are taxed. The profits derived from spread betting are tax-free. But the profits from CFD instruments are taxed and traders have to pay a certain amount. Furthermore, spread betting positions have a fixed expiry date, whereas the CFD positions have no expiry date.
- CFD Trading – CFD trades are subject to Capital Gains Tax but are exempt from Stamp Duty since the underlying asset is not owned by the trader. CFD losses are tax deductible, which tends to appeal more to experienced traders. Finally, CFD positions are based on the asset’s open and close price, whilst spread betting positions are based on points movement.
How to choose a spread betting broker? – A Spread betting comparison
Fees charged
The spread betting platform that you choose, should fully disclose the fees and costs charged to the traders. Spread betting trading is commission-free trading, therefore make sure that your broker does not charge any hidden fees. Next, you need to think about the spread, which is the difference between the bid price and the offer cost of the asset you are trading. A broker will charge for the opening and closing of a bet for you, so to make a profit you will need to look for the lowest spread.
Customer Service
The customer service provided by the broker plays an important role when selecting a forex broker. You will have to look for a broker that offers 24×7 support and guidance. The broker should be available to answer your queries via text, call, and email. As for some bets, you might want to be in touch with your broker throughout the day.
Regulation
Regulation is one of the most important factors to consider when looking for a spread betting platform. Since the forex market is not fully regulated, you require a broker that can secure your details and transactions. For traders in the UK, look for a broker that is regulated by the Financial Conduct Authority (FCA). get a list of all the best-regulated forex brokers in the UK at forex broker reviews.
Tools and Techniques
Trading in the forex market requires certain indicators and charts that help to determine the price movements. For beginners, these indicators can prove to be quite useful as they can assess the market easily. Therefore, while choosing a spread betting platform look for brokers that have all the updated and required tools and features.
Ease of use
If a platform is not user-friendly and well designed you might get confused and even leave the broker’s site. Sometimes this can also be the cause of delayed trades. Therefore, a spread betting platform should be able to easily navigate users through all the features and functions of the platform.
Final thoughts
Spread betting has numerous advantages as we have mentioned above. If you are new to the world of spread betting, then we would recommend you carefully select a broker that caters to your requirements. While reviewing all the brokers, according to the spread betting comparison the best spread betting platform for beginners is IG. on the other hand advanced traders can look for options like Pepperstone, and FXMC.
Hope this guide was able to provide you with the best spread betting app and platforms.
FAQ’s
Q1. Do I have to pay tax on spread betting?
Ans: spread betting in the UK is not considered an investment, as there is no purchase of any actual asset. Therefore it is not taxable and is commission free.
Q2. Is spread betting good for beginners?
Ans: spread betting involves monitoring the price fluctuations of the assets in the forex market. Traders who have knowledge and experience in the market are considered more fit for spread betting.
Q3. Is spread betting legal and safe?
Ans: spread betting is legal in the forex market. You need to choose a regulated platform to make sure that all your transactions are secured and protected.
Q4. Can I make profits with spread betting?
Ans: Spread betting can yield high profits if the bets are placed correctly. creating a systematic trading plan following years of experience can get you good returns.
