Spread betting is a derivative trading strategy whereby traders get to speculate on an asset’s price movement without owning the asset. In the UK, the activity is classed as gambling, although the Financial Conduct Authority (FCA) oversees it.
It is one of the activities in the UK’s financial market traders enjoy, especially since it is tax and stamp-duty-free. It also allows traders to go long or short on a position.
Unfortunately, spread betting is not legal in the US, and American citizens cannot partake in the activity. This is because online gambling is restricted in the US, and since spread betting is classed in the same category, it will be difficult for US traders to try it out.
If you want exposure to a similar environment in the US, you can try trading options and futures, although the leverage attached to these trading methods may not be as high as with spread betting.
The good news is that American citizens in the UK can spread bet on various instruments, including stocks using the best CFD brokers since many of them also offer spread betting.
However, you must provide proof of location, such as a driver’s license or utility bill, when registering for an account with a broker. This way, you get exposed to global stocks listed on a broker and make your choice just like any other trader in the UK.
Top Spread Betting Brokers For Stocks in the UK
You must select the best spread betting broker in the UK listing your preferred stocks to trade and maximize your profitability. Below, we list the top three based on expert recommendations.
1. IG Markets
IG Markets is reputable globally and is regulated by multiple tier-one authorities, including the FCA. With IG Markets, you get exposed to global shares such as Tesla, Amazon, Google, etc., to spread bet.
The best element about using IG Markets is that you not only get exposed to shares but also additional asset classes for portfolio diversification. IG Markets is the biggest spread betting broker in the UK and globally.
There are no commissions while spread betting with IG Markets, and you get to pay a low spread. Although its $300 minimum deposit requirement might seem high for budget-conscious traders, the broker offers high-quality resources that make it worth spread betting with.
2. Spreadex
Spreadex is another popular spread betting broker in the UK, hosting numerous stocks and additional assets. The broker is highly regulated by FCA, and it doesn’t have a minimum deposit requirement to access the available shares.
It is also one of the best spread betting brokers fit for low-budget stock traders since it charges low spreads. Its platform is also user-friendly and backed with advanced risk management tools.
Unfortunately, Spreadex doesn’t have a demo account. This shouldn’t be a deciding factor since it doesn’t have a deposit requirement and charges low spreads.
3. Capital.com
Capital.com offers innovative tools and platforms for spread bettors in the UK. With this broker, you get to boost your performance in the stock market as you will get great insights into price trends that might benefit your strategy development.
Like Spreadex and IG Markets, Capital.com is user-friendly and customizable, making it suitable for all types of spread bettors.
Capital.com has a minimum deposit requirement of $20 and offers a demo account you can test it with before spread betting in the live markets. Plus, you can download its app and manage your positions whenever you step away from your trading station.
Verdict
Although spread betting in the US is illegal, US citizens have other options to benefit from financial management. For instance, you can trade CFDs, options, futures, etc. Simply find the best broker hosting such assets by considering your funds’ safety and other requirements, including charges, reliability, etc.
Overall, spread betting can be lucrative if you have a solid plan and are dedicated to managing your positions. The best thing about this derivative form of trading is that it is tax-free and allows you to go long or short, depending on an asset’s price direction.
Plus, you can use spread betting to hedge already existing positions and limit the risk of incurring massive losses. That being said, try spread betting today and remember to apply leverage with amounts you are comfortable losing.
