Spread betting is a valuable alternative to traditional investing – especially if you are based in a country with attractive tax laws. One of the most essential things when spread betting is choosing a reliable and cost-effective broker to facilitate your trades, as this can make all the difference over the long run. To help streamline this process, this guide explores the Best Spread Betting Brokers available this year – reviewing the top options and highlighting how you can begin commission-free spread betting in under ten minutes. Best Spread Betting Brokers 2021 List Are you looking for a breakdown of the best spread betting brokers? Then you’re in the right place! The list below showcases the best forex spread betting brokers available in the market, with the following section reviewing each of these spread betting platforms in detail. Capital.com – Overall Best Spread Betting Broker 2021 Pepperstone – Best Spread Betting Broker 2021 for Tight Spreads Spreadex – Best Spread Betting Broker 2021 for Versatility AvaTrade – Best Spread Betting Broker 2021 with MT4 Support FXCM – Best Spread Betting Broker 2021 with 0% Commissions IG – Best Spread Betting Broker 2021 with Huge Range of Assets Top Forex Spread Betting Brokers Reviewed Choosing a suitable spread betting broker is a crucial component in your trading journey as it ensures you can trade safely and cost-effectively. These days, so many brokers offer spread betting facilities, so it can be tricky to decide which one is best for you. Not to worry! This section reviews the six best spread betting brokers available to traders this year, covering crucial elements such as fees, spreads, and leverage. 1. Capital.com – Overall Best Spread Betting Broker 2021 When it comes to the best spread betting brokers available on the market, Capital.com takes the number one spot. This broker is heavily regulated by top regulator entities such as the FCA (Financial Conduct Authority) and CySec, ensuring every user’s data and capital is protected. Furthermore, Capital.com receives oversight from the FSCS, which ensures users’ money is insured up to £85,000 in the event of the company going bankrupt (only applicable to the UK). Capital.com’s main selling point is the appealing fee structure they offer. Users can benefit from commission-free spread betting on over 3000 top markets, making Capital.com an extremely cost-effective broker choice. What’s more, this broker offers incredibly tight spreads on most of their assets and provides super-fast execution times. Another great thing about Capital.com is the trading app they offer. This app provides an all-in-one spread betting experience – and is powered by advanced AI algorithms which help to boost your trading efficiency. This AI tracks your decisions and provides personalised recommendations that can ensure you avoid common pitfalls that traders fall into! Pros: 0% commission and tight spreads Thousands of markets for spread betting Spread betting on forex, commodities and stock market Minimum deposit of just $20 Supports debit/credit cards and e-wallets Great for beginners MT4 supported Leverage available – limits depend on your location Cons: You can’t invest in the underlying asset – CFD instruments only Visit Capital.com Now 72.6% of retail investor accounts lose money when trading CFDs with this provider 2. Pepperstone – Best Spread Betting Broker 2021 for Tight Spreads Another of the best forex brokers that offer spread betting facilities is Pepperstone. Pepperstone is based in Australia and provides a vast range of financial services to traders through its user-friendly platform, which is regulated by the FCA and ASIC. Furthermore, Pepperstone ensures they cater to traders of all experience levels by offering full support for MT4, MT5, and even cTrader. Pepperstone offers a huge selection of assets to spread bet on, including currency pairs, indices, and shares. Much like Capital.com, Pepperstone does not charge any commissions when you place a spread bet – as all fees are incorporated into their tight spread. To provide an example, the average spread for EUR/USD when spread betting is only 0.79 pips! These low spreads make Pepperstone one of the best spread betting brokers for traders this year. Pros: Regulated by the FCA and ASIC Support for MT4, MT5, and cTrader Huge selection of assets for spread betting 0% commissions Competitive spreads on most assets Active trader program offers rebates Cons: Large minimum deposit on some of the trading account types Visit Pepperstone Now Your capital is at risk when trading financial instruments at this provider 3. Spreadex – Best Spread Betting Broker 2021 for Versatility If you are looking for versatility in asset selection, then Spreadex might be a good brokerage for you. Spreadex offer spread betting accounts for both the financial markets and sports betting. Their financial markets section is widely regarded as one of the best on the market and even won the prestigious COLWMA award in 2020 for the Best Spread Betting Provider. Much like other brokers, Spreadex’s fee is incorporated into the spread. These spreads are very low – for example, GBP/USD spreads are only 0.9 pips on average. Another great thing about Spreadex is that users can deposit from as little as £1, ensuring beginners can start small and work their way up. Spreadex even offers a helpful demo account feature that allows you to practice risk-free. Finally, Spreadex enables users to trade through their online platform or their mobile app – ensuring flexibility when trading throughout the day. Pros: Sports and financial spread betting Deposit as little as £1 Tight spreads on forex Helpful demo account feature Trade on the web platform or app Cons: Length account opening process Visit Spreadex Now Your capital is at risk when trading financial instruments at this provider 4. AvaTrade – Best Spread Betting Broker 2021 with MT4 Support One of the best fx spread betting brokers available this year is AvaTrade. AvaTrade represents one of the best MT4 brokers as the platform is regulated by various entities around the globe, including MiFID, ASIC, and FSCA. We recommend AvaTrade highly when it comes to spread betting as they offer over 200 markets to trade, including FX, commodities, indices, equities, and more. Users at AvaTrade can utilise up to 30:1 leverage, essentially allowing you to boost your potential profits by 30x. AvaTrade’s spread betting facilities are offered through MT4, which is ideal for people looking to trade the forex market as it ensures traders can use forex tools such as custom indicators. The minimum initial deposit at AvaTrade is reasonable, set at $100. This can be completed fee-free by using a credit/debit card, bank transfer, or e-wallet. Pros: Regulated in 6 different jurisdictions Supports spread betting on forex pairs, commodities, shares, and more 0% commission and tight spreads Compatible with MT4 Minimum deposit of just $100 Leverage offered on all markets Cons: CFD selection is limited in comparison to other platforms Visit AvaTrade Now 71% of retail investor accounts lose money when trading CFDs with this provider 5. FXCM – Best Spread Betting Broker 2021 with 0% Commissions FXCM was established back in 1999, equating to more than 20 years of industry experience. The broker is owned by Jeffries Financial Group, which is listed on the NYSE – adding a considerable level of credibility to FXCM’s services. When trading with FXCM, you will not have to pay any commissions when you place a trade, and spreads are often very competitive. For example, the average spread for EUR/USD is around 1.3 pips – although this can fluctuate depending on market volatility and trading conditions. One of the great things about FXCM is that they allow you to use tiny stakes – users can open positions from only 7p per point. The minimum deposit for FXCM is $300 for EU-based countries, although users from non-EU countries can deposit as little as $50. In terms of the trading platform, FXCM offers their own proprietary online platform, alongside MT4, Ninjatrader, Zulutrade (for copy trading), and their own mobile app. Finally, FXCM also offers a massive library of educational resources for new people interested to start trading, including tutorials, videos, and webinars. Pros: Supports various 3rd party platforms Established for over 20 years No commissions Low stake amounts offered Huge library of educational resources Cons: High minimum deposit for EU-based traders Visit FXCM Now 73.05% of retail investors lose money when trading CFDs at this site 6. IG – Best Spread Betting Broker 2021 with Huge Range of Assets Rounding off our list of the best spread betting brokers is IG. IG was first established back in 1974 and is currently one of the largest brokers in the world. As IG is so well-established, they benefit from FCA and BaFin regulation – and are even listed on the LSE. Furthermore, IG’s spread betting account allows users to speculate on over 17,000 assets, ensuring there’s always a trading opportunity to be had. IG does not charge any commissions and instead uses a spread-based structure – typical spreads can be from only 0.6 pips for FX trading and 0.1 pips for shares (such as FTSE 100). Users also get the option to utilise leverage when spread betting, which can be up to 30:1 for currency trades. Another great feature of IG’s platform is the extensive selection of educational materials on offer, including tutorials, videos, and even a free demo account! If you decide to open a real account, there is no minimum deposit if you use a bank transfer – although this does rise to $300 if you use a credit/debit card. Pros: Established in 1974 and listed on the London Stock Exchange Offers both CFD and spread betting markets Regulated by the FCA and BaFIN Forex spreads start from just 0.6 pips Supports MT4 Offers traditional stocks and funds for UK investors Cons: High initial deposit for credit/debit card Visit IG Now 71% of retail investor accounts lose money when trading CFDs with this provider Spread Betting Brokers Comparison As you can see from the section above, there are numerous spread betting brokers that you can partner with when looking to begin forex trading. To help you narrow down the options, the table below presents information on key elements such as spreads, assets, and fees. This spread betting brokers comparison table will help ensure you make the best decision possible for your unique investment situation. Available Assets GBP/USD Spread Amazon Shares Spread Deposit Fees Withdrawal Fees Capital.com Shares, currencies, indices, commodities, ETFs 1 pip Variable (20.18 at time of writing) None None Pepperstone Shares, currencies, indices, commodities, ETFs 1.28 pips Variable None Free for credit/debit card; $20 for international bank transfers Spreadex Shares, currencies, indices, commodities, ETFs, bonds, options, sports betting 0.9 pips Variable None None AvaTrade FX, commodities, shares, indices 1.6 pips Variable None None FXCM FX, commodities, shares, indices 1.7 pips Variable None Free for credit/debit card; fee applies for bank transfer IG Shares, currencies, indices, commodities, ETFs, bonds, options 1.4 pips Variable None Free for credit/debit card; fee applies for bank transfer What is Spread Betting? Spread betting is a simple way for traders to speculate on the price movements of an asset without having to own the underlying asset. Often offered as an additional service by CFD brokers, spread betting involves placing a trade based on the direction you feel an asset’s price will head over the short term. For example, if you think that Amazon’s price is set to increase, you could place a ‘Buy’ order on your spread betting account. This is where spread betting gets its name, as you’ll essentially be placing a ‘bet’ on which direction price will move. The amount of money you risk when spread betting (known as your stake) is on a per-point basis. Using the example of Amazon again, you may wish to risk £10 per point. Spread betting also allows leverage, which is essentially borrowing money from the broker to boost your position size and, therefore, your potential profits/losses. Some high leverage forex brokers may offer extensive leverage options that be 30:1 or more. Using leverage this high can increase your profit potential by 30x. However, it’s important to remember that it does the same for your potential losses, so always use leverage wisely. How Does Spread Betting Work? It may seem confusing at first, but spread betting is actually really simple to understand. Essentially you are placing a ‘bet’ on which direction you think the price will move. The underlying asset you’re betting on can be a wide variety of things, such as currencies, stocks, ETFs, and even sports! When you spread bet, you either go ‘long’ or go ‘short’ on an asset. This basically refers to whether you believe the price of the asset will rise or fall, respectively. Once you’ve decided which direction you feel the price will move, you then need to decide on how big a stake you’d like to use. The stake functionality in spread betting work slightly differently than traditional CFD trading, as your stake is the amount you’re risking per ‘point’ of movement. These ‘points’ depend on the specific asset you are trading, so they can vary. The example below highlights a typical spread bet position: You have a feeling that Amazon’s shares will increase You take a long position in Amazon shares when they are priced at $3700 You set a stake so that one point equates to $10 Amazon’s share price increases to $3750 You close out your position and receive your profit – as the price moved 50 points, you multiply this by $10 to receive a $500 profit! Spread Betting Tax One of the main benefits of spread betting is the attractive treatment it receives when it comes to tax. Most notably, spread betting in the UK is classified as gambling – which means that any profits you make at not subject to capital gains tax or stamp duty. This is in contrast to investing in some other assets, which would require you to give a portion of your profits to HMRC as tax. It’s important to note that this ‘tax-free’ status is only relevant if you are based in the UK. Some other countries may tax your winnings – or may not even allow you to spread bet at all. Therefore it’s vital to research this beforehand and make sure you understand the tax laws for your country of residence. How to Choose the Best Spread Betting Broker for You Deciding which of the best spread betting brokers is suitable for you involves conducting lots of research and paying attention to critical areas that can help your trading success. To streamline the whole research process, this section presents seven of the most important factors to consider when choosing a spread betting broker: Security Not unsurprisingly, security is top of the list of things you need to pay attention to. One of the best tips for forex traders is to look out for brokers that offer regulation from top-tier entities. These entities include the FCA, CySec, ASIC, and MiFID. Any broker regulated by a top-tier entity will have to abide by strict policies and rules designed to protect users. Some brokers, such as Capital.com, also offer protection from the FSCS. This ensures that users based in the UK can be compensated up to £85,000 if the broker goes bankrupt. Having this additional level of security can allow you to trade in confidence, knowing that your capital is protected should the worst happen. Spread Betting Instruments The best spread betting companies will offer a diverse range of assets for users to speculate on. Typical markets include equities, forex, indices, and ETFs. Some brokers will also provide less traded markets such as bonds and options – although these are perhaps more suitable for experienced traders. As spread betting is quite a versatile activity, some brokers (such as Spreadex) will offer spread betting facilities for non-financial assets. These include sports betting, where users can speculate on various sports such as football, cricket, basketball, and more. Fees & Spreads Fees and spreads are other crucial things to consider when choosing a spread betting broker. Most brokers will incorporate their fee into the spread that is quoted on each asset. This spread is the difference between the price you can buy the asset and the price you can sell it at – brokers will keep this spread as a sort of ‘commission’ for facilitating your position. Non-trading fees are also essential to be aware of. These will vary from broker to broker, so double-check the broker’s website before signing up. Some examples of these include: Deposit Fees Withdrawal Fees Inactivity Fees Monthly Account Fees Overnight Financing Fees Platforms The specific platform that you use to trade on is a crucial component of your trading experience. There’s no point in signing up with one of the best fx spread betting brokers, only to find out that their platform is not very user-friendly or practical to use. Many brokers will offer their own proprietary platform, which tends to be available online and on your smartphone. However, some spread betting brokers will also support third-party platforms such as Metatrader 4, Metatrader 5, or even cTrader. These platforms are beneficial if you are forex day trading as they ensure you get real-time price information and execute orders as quickly as possible. Trading tools & features Following on from the previous section, it’s a good idea to make sure that the platform you choose has a good selection of tools and features for you to employ. The best fx spread betting brokers will offer comprehensive charting tools such as indicators and alerts that can help you optimise your trading experience. Some brokers, such as Capital.com, even provide educational resources which are ideal for beginners to the global markets. Leverage is also another tool to keep an eye out for, as this can help boost potential profits. The amount of leverage offered by a broker will depend on the asset to be traded and where you reside; however, this tool can be a crucial component of making notable gains in the market. Payment Methods The payment methods that a broker accepts should also be on your list of criteria to research. Most brokers these days will accept credit/debit cards, bank transfers, and e-wallets. The specific e-wallets accepted will vary from broker to broker, but popular ones include PayPal, Neteller, Skrill, and Trustly. Customer service Finally, the level of customer service offered by your chosen spread betting broker is an essential element of your trading experience. If you ever have a dispute related to your account or just need help with something, it’s great to have access to customer service to get you answers quickly. The best brokers offer 24/7 customer support across a variety of mediums. These include phone, online chat, or email. Some brokers (including Capital.com) will have an extensive FAQs section covering most of the topics that customers tend to have questions regarding. How to Get Started with a Spread Betting Broker Now that you have a solid idea of who the best spread betting brokers are and the key things you need to look out for, it’s time to discuss the process of signing up and beginning to trade. As noted earlier in this guide, we recommend Capital.com for traders who wish to make money with forex as they offer a user-friendly spread betting account – with no commissions whatsoever. Step 1: Open Account on Capital.com Head over to Capital.com’s homepage and click ‘Trade Now’. Enter a valid email address and choose a password to create your account. Alternatively, you can begin the account opening process using Capital.com’s smartphone app – one of the best trading apps available on the marketplace. Sign Up With Capital.com Now and Trade With Competitive Spreads 72.6% of retail investors lose money trading CFDs at this site Step 2: Verify your Account As Capital.com is a heavily regulated broker, new users must complete some KYC checks and verify their identity before trading. Fortunately, this is super easy to do and can be completed online. Simply enter the required personal information and then upload proof of ID (a copy of your passport or driver’s license) and proof of address (a copy of a bank statement or utility bill). These documents will then be checked, which usually only takes a few minutes. Step 3: Fund your Account One of the great things about Capital.com is that they allow users to deposit as little as $20 to fund their account – one of the lowest minimum deposits in the industry. In terms of deposit methods, Capital.com accept the following: Credit card Debit card Bank wire transfer iDeal Giropay ApplePay Trustly Step 4: Search for Currency Pair to Trade You can search for your chosen currency pair using Capital.com’s dedicated online platform. However, Capital.com also has a dedicated spread betting app powered by AI and offers a quick and easy way to place spread bets. Once you download the app and sign in, you can search for the currency pair you’d like to speculate on. Step 5: Place Spread Bet Once you have found the currency pair you’d like to trade, you’ll be presented with the option to ‘buy’ or ‘sell’. Decide which direction you feel the asset will go and then enter your stake – in spread betting, your stake is essentially the amount you’d like to ‘bet’ per point of the asset’s price movement. Once you are happy with everything, then go ahead and open the trade! And that’s it! You’ve just began spread betting with one of the best UK spread betting brokers – all without paying any commissions! Best Spread Betting Brokers – Conclusion As you can see from this guide, there’s a significant number of spread betting brokers to choose from for traders interested in this type of trading. By reviewing the information provided, you can be sure that you’ll find a reliable and cost-effective broker that can help you spread bet effectively going forward. However, if you’d like to get started right away, we’d highly recommend using Capital.com. We recommend Capital.com for spread betting as users do not have to pay any commissions on their trades, and spreads are very tight. What’s more, Capital.com allows minimum deposits from only £20 – ensuring users can start small and work their way up as they please. Visit Capital.com Now 72.6% of retail investors lose money trading CFDs at this site FAQs What is spread betting? Spread betting is simply a way of speculating on the price movements of an asset. Instead of owning the asset, you essentially ‘bet’ on which direction you believe the price will head. Is spread betting risky? Similar to all investments, there is a certain level of risk when spread betting. However, this risk can be mitigated by only using reasonable amounts of leverage and employing careful risk management. How much money do you need to start spread betting? This depends on the broker that you decide to partner with. However, Capital.com offers one of the industry’s lowest investment thresholds – allowing users to deposit as little as £20 to get started. Is spread betting gambling? Spread betting is considered gambling in a legal sense – although it differs hugely from traditional gambling activities. In spread betting, you are speculating on the price of an underlying asset, which involves placing an initial stake. Traders will either receive a profit or a loss at the end of the trade, which is tax-free under most jurisdictions. Is spread betting tax-free? Spread betting profits are exempt from capital gains tax and stamp duty in the UK and Ireland. However, the exact tax rules can differ depending on the country and are subject to change – so make sure to research this beforehand. Connor Brooke Connor Brooke Connor is a Scottish financial specialist, with a particular focus on wealth management and equity investing. Currently based in Glasgow, Connor writes full-time for a vast array of top financial websites, whilst also providing financial consulting to small start ups. He also holds a Bachelor’s degree in Finance, and a Master’s degree in Investment Fund Management, Connor has substantial knowledge in the investment and finance space, He has also written two thesis on mutual funds and the UK financial market. 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