Spread Betting with AxiTrader

  • Trade Forex, CFDs or Indices
  • Tax free trading status in the UK
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What is Spread Betting?

Spread Betting is just like any other form of online trading: you select a financial instrument – whether it be Forex, CFDs or Indices – then speculate whether the price is going to go up or down. You’re essentially ‘betting’ on whether the price will have increased or decreased at a specified point in time.

What’s the difference between FX trading and Spread Betting?

With AxiTrader the answer is: not much. Both FX trading and Spread Betting work in the same way, using the same MT4 trading platform – if you know how to place a Forex trade, you can place a Spread Bet. The fundamental difference is that Spread Betting is classified differently to regular trading, giving it tax free* status in the UK.

How is Spread Betting different with AxiTrader?

AxiTrader operates differently to most Spread Betting operators.

The most common form of Spread Betting operates on a “pound per point” basis whereby you get an incremental return for every pound you put down, based on how much the market moves – this is a characteristic typical of sports betting. For example, if the current price is $100 and you think it was going to go up, you could place a £5 Spread Bet. If the price increased to $105, you would take a £25 profit. If it went down to $95, you would incur a £25 loss.

Our Spread Betting works in exactly the same way as our standard Forex and CFD trading. Unlike typical sports betting, our pricing is not fixed – it ebbs and flows with the normal movement of the markets. In effect, Spread Betting with AxiTrader is simply standard FX trading with a different tax classification.

What is the ‘Spread’ in Spread Betting?

A spread is derived from two prices: the Buy price and the Sell price. The difference between these two prices is what’s known as the ‘Spread’.

The main factors influencing the spread include market liquidity, supply and demand; any time liquidity is low and there is an imbalance between supply and demand, the spread is likely to be wider. As a trader, you generally want – and you want your broker to offer – the narrowest spread.

If I place a Spread Bet, do I own any assets?

No. When you open a spread bet you’re simply investing in a price movement, like that of a currency or commodity.

This is different to buying stocks where you take physical ownership. In the case of stocks you need the price to increase in order to realise a profit, but the nature of Spread Betting means you can trade on the downside and profit even if the price of an instrument is falling.

Advantages of Spread Betting

Tax free trading

Many traders prefer Spread Betting over Forex because it has tax free* status.

*UK and Ireland residents only. Traders should bear in mind that tax laws are subject to change and traders should monitor their personal circumstances.

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