UK residents trade tax-free^* on a full range of markets.

Spread betting is a tax-efficient alternative to conventional trading. Spread bets are financial derivatives that let you speculate on the price movements of various underlying assets but you don’t own the underlying asset.You can go long or short on a wide range of global instruments. This means that if you believe the price of an instrument (for example, the UK 100 or US Wall St 30) will rise, you’d go long or buy the instrument. If you believe the price of the instrument is likely to fall, you may sell or take a short position. If you were right, you could make a profit, otherwise you’d make a loss (please note, the price must move beyond the spread amount for you to break even and begin making a profit).

Spread betting is a derivatives product, meaning you don’t physically own the underlying instrument. Instead, you take a position based on the direction in which you expect the price of the instrument to move. Margin refers to the funds you need in your account in order to open a position. When you trade a position using leverage, you only need to deposit a fraction of the full value of the trade. Leverage is described as a "double-edged sword" because whilst it can lead to considerable profits if the market moves in your favour, it can also result in significant losses just as easily if the market moves against you.

When spread betting, you are essentially taking a position on market price movements. If you wager on a market price increasing, then you are “going long,” while if you wager on a market price decreasing, then you are “going short”.

There are several types of orders that you can use to mitigate against risk.

At OANDA, we offer stop-loss orders and guaranteed stop-loss orders (GSLO), to help you mitigate against risk. Stop-loss orders automatically close a trade position to restrict losses, however you are still at risk of slippage. You can further limit your losses by paying a premium for a GSLO, ensuring you wouldn’t be at risk of slippage.

No, you don’t have the same rights as an investor when spread betting because you never take ownership of the underlying asset.