Spread betting Forex vs. regular trading forex

Is there any major differences guys,

The main difference that i'm aware of is the no tax on spread betting profits,which i find highly appealing.

Is it as easy trade via spread betting as the normal way ?

Regards...

Arrow

I’ve been spread betting a 1k account for 6months and still don’t know the difference

seems to be a uk thing ?

Hi arrowloopboy,
There is a major structural difference in that you conventionally trade in the market itself through a broker with another market participant taking the other side of your trade; in spread betting you are not dealing directly in the market at all, your counterparty is the spread betting company - a financial bookmaker - which is itself making a book based on the underlying market. Because you are undertaking a betting transaction with a bookmaker rather than a direct market trade the tax treatment in the UK is different; you pay betting levy upfront rolled up in your dealing spread and do not pay any sort of capital gains tax on your profits, these being seen as tax-prepaid betting winnings. Equally, you still pay the levy for losing trades and get no tax deduction allowed for them.

If you deal with a reputable spread betting firm that has a good dealing platform, you should find little practical difference compared to dealing in the normal fashion. The spread betting company has to keep its book prices closely in line with the true underlying market or it will find itself subject to arbitrage activity against it. That said, stories abound of poor spread betting pricing and poor trade fills - usually in out-of-hours trading and exotic markets - so it is probably best to stick to reputable spread betting companies and the major markets in normal trading hours. Hope that helps.

Hi Oldtraderman,

I'm based in EU and in 2017 was able to open a spread bet account with a reputable UK firm. In 2021 my account was closed due to brexit. Do you know if there is a way for non UK residents to open a spread betting account with a UK firm? A corporate account will be accepted?

Many thanks
New

Hi New,
I'm afraid I don't as it is not something I've ever had to face, being a UK resident. I did find this on the web, though, so it may be a matter of just trying to find a provider who will accept you: https://www.financial-spread-betting...u-illegal.html.