Spread betting on shares lets you speculate on individual stock prices without buying the underlying shares. Profits are tax-free, there is no stamp duty, and you can go short as easily as going long.
How Share Spread Betting Works
Instead of buying 100 shares of Barclays at 200p, you might bet £1 per point on Barclays at 200. If the price rises to 220, you make 20 points × £1 = £20 profit. If it falls to 180, you lose £20.
Key differences from owning shares:
- No ownership — you do not own the shares or have voting rights
- Leverage — you only need 20% margin (5:1 leverage) under FCA rules
- Go short — profit from falling prices as easily as rising ones
- No stamp duty — saving 0.5% compared to buying shares directly
- Tax-free — no CGT on profits
Dividends and Corporate Actions
Dividends
When a stock goes ex-dividend, your spread bet is adjusted:
- Long position: You receive a dividend credit (typically 80-90% of the gross dividend, after withholding tax)
- Short position: You are charged the full dividend amount. This is important — high-yield stocks can be expensive to short around ex-dividend dates.
Stock Splits and Rights Issues
Your broker adjusts your position automatically to reflect corporate actions. Your economic exposure stays the same. Check with your broker for specifics, as the handling can vary.
UK Shares vs US Shares
| Feature | UK Shares | US Shares |
|---|---|---|
| Trading hours | 08:00-16:30 GMT | 14:30-21:00 GMT |
| Currency | GBP (pence per share) | GBP (converted from USD) |
| Spreads | Typically wider | Typically tighter (more liquid) |
| Range | FTSE 100 + FTSE 250 | S&P 500, Nasdaq, NYSE |
| Dividend withholding | None | 15% (treaty rate) |
Best Brokers for Share Spread Betting
- IG — 16,000+ markets including US, European, and Asian shares
- CMC Markets — 9,000+ shares with excellent charting and company research
- Saxo — wide international share range, professional-grade tools
- City Index — good UK and US share coverage with TradingView integration
Shares vs Index Spread Betting
Individual shares are more volatile than indices and carry company-specific risk (earnings surprises, profit warnings). The 20% margin requirement also means you need more capital per position than for indices (5% margin). Many traders use a mix: indices for general market exposure and shares for specific trading ideas.
Between 51-82% of retail investor accounts lose money when spread betting. Individual shares can be more volatile than indices.
