Options & derivatives
Spread betting
A leveraged bet on price movement, structured as a wager rather than an investment.
How it works
Available mainly in the UK and Ireland, it is taxed as gambling rather than as investment, which is its principal attraction to users.
Economically it behaves like a CFD: leveraged, financed overnight, and capable of losing more than the deposit.
Where it misleads people
Because losses are not tax-deductible either, the tax treatment is symmetric — and given the loss rates on these products, the symmetry favours the provider.
Related terms
- Contract for differenceA leveraged contract paying the difference in an asset’s price, without owning it.
- LeverageUsing borrowed money to increase exposure beyond what your own capital would buy.
- Margin callA demand from your broker to add cash or sell holdings, because your account equity has fallen too low.
More in Options & derivatives
All 30 Options & derivatives terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.