Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets, CFDs, OTC options or any of our other products work and whether you can afford to take the high risk of losing your money.
Learn about the trading costs involved in spread betting, plus other useful factors to consider
before you get started.
Some of the costs involved in spread betting depend on the way in which you trade. We provide competitive, transparent pricing without hidden costs. Learn more about each of the potential costs of spread betting via the menu on the left below.
The spread is the key cost involved in spread betting, and is the difference between the buy and sell price of an instrument. The narrower the spread, the better value you receive, because the market only has to move slightly in your favour to offer the possibility of a profit on your spread bet.
We offer spreads on key FX pairs like EUR/USD from 0.7 points, 1 point on major indices like the UK 100, and 0.3 points on Gold.
Spreads on popular instruments
1We build an additional spread into the share prices we display on our spread betting platform, applicable on execution of any order. This may vary depending on the country of the stock you are spread betting on.
Some spread bets held open past the end of the trading day (5pm, New York time) are subject to holding costs, which can be positive or negative depending on your trade direction and the applicable holding rate. Holding costs for shares and indices are based on the underlying interbank rate for the instrument, plus 0.0082% on buy positions or minus 0.0082% on sell positions.
| Currency | Interbank rate |
|---|---|
| AUD | One month bankers acceptance bill |
| CAD | One month bankers acceptance bill |
| CHF | One month Libor |
| DKK | One month Copenhagen interbank offered rate |
| EUR | One month Euribor |
| GBP | One month Libor |
| HKD | One month Hong Kong interbank offered rate |
| INR | One month deposit |
| JPY | One month Libor |
| NOK | One month Norwegian interbank offered rate |
| NZD | One month bank bill |
| SEK | One month Stockholm interbank offered rate |
| SGD | One month Singapore interbank offered rate |
| USD | One month Libor |
| ZAR | One month deposit |
You are able to roll forward positions over to keep a trade open beyond its expiry date. When you roll a forward position to the next contract, your profit or loss is realised and you enter the new trade at the mid-price, saving 50% on the spread cost.
Key rollover dates
| Expiry date | The last possible date that a forward trade will automatically expire |
| Last rollover date | The last possible date that a forward trade can be manually rolled over or set to auto rollover |
| Last trade opening date | The last possible date and time at which you can enter into or extend a bet or modify an existing order (including a pending order) on a particular forward |
As part of our risk management solution, you can add a guaranteed stop-loss order (GSLO) to your trade, which guarantees to close you out at your specified level, regardless of market volatility or gapping. A cost is applied for using a GSLO, but if it's not triggered we'll refund 100% of the original GSLO charge. The charge, or ‘premium’, is calculated by multiplying the premium rate by the bet size.
GSLO premium examples
| Product | Spread bet GSLO premium rate | Bet size | GSLO premium |
|---|---|---|---|
| UK 100 | 1 point | £5/point | £5 |
| US 30 | 1.5 points | £5/point | £7.50 |
| Germany 40 | 1.5 points | £5/point | £7.50 |
| EUR/USD | 1 point | £5/point | £5 |
| GBP/USD | 1.5 points | £5/point | £7.50 |
| Gold | 0.3 points | £10/point | £3 |
| Crude Oil Brent | 2 points | £5/point | £10 |
There's a monthly charge of £10 (the amount depends on your account currency) on dormant accounts, but no deduction is made if there are no funds in the account. An account is considered dormant if there has been no trading activity for a continuous period of one year.
In addition to the costs associated with spread betting, listed above, there are a few more potential factors to consider.
If you spread bet on indices, forex or commodities in high volumes, you could be eligible to receive a monthly cash rebate^. In our 2018-19 financial year, we paid out £14.1 million in cash rebates to our clients globally.
A corporate action – such as a dividend, stock split or right issue – is an event which has a material effect on a company’s share price, and should you have an open position in that stock, could also affect your position and account balance.
One of the advantages of spread betting is that you only need to deposit a percentage of the full value of your position, giving you greater exposure without paying the full costs upfront. You should keep in mind however, that both profits and losses are relative to the full value of your position, and you could lose more than your deposit.
If you spread bet on US shares, there’s a simple form (W8-BEN) you should complete to ensure you don’t pay too much tax on dividend income.
The US Internal Revenue Service (IRS) has regulations in place to make sure that foreign holders of US equity derivatives, including spread bets, are taxed on dividend income in the same way as foreign holders of the underlying equities.
If you spread bet on US shares, please complete the form to confirm your country of residence for tax purposes. Simply download the form, enter your details, print and sign it, then email it to: clientmanagement@cmcmarkets.co.uk.
Discover where our spread betting prices come from and how we endeavour to find the best available price, and learn the differences in pricing between cash and forward instruments, and in- versus out-of-hours trading.
How do we get you the best price?
Our automated pricing engine collates and checks thousands of prices per second from industry-leading data vendors and liquidity providers. Any erroneous prices are discarded, meaning the prices you see are derived from this cleansed data.
Our prices are generated electronically, and based on the market prices of the relevant underlying instrument. Where the underlying instrument is traded on an exchange, we source prices from industry-leading data vendors, and where the product is traded over the counter (OTC), for example FX, we source prices directly from our liquidity providers.
Every provider has a slightly different way of pricing their markets. To price cash contracts, some take a live feed from the underlying cash price as a reference, while other providers opt for a static premium or discount to the futures market. Some providers might price around the market bid or offer, whereas others price around the mid-price. Price differences will also be apparent if providers apply dividend drop points at different times of the day.
There are certain circumstances where we have to generate our own prices manually rather than through our automated pricing engine, for example where we quote prices for spread bets outside the market hours of the underlying instrument. We do this to provide you with liquidity outside of these market hours. Where we generate prices manually, we endeavour to produce a fair price, taking into account price movements from markets that are open at that moment in time, as well as our own market for the relevant instrument.
Forward-based instruments are designed to price in any known factors that could affect the price of the instrument between the current date and the forward expiry date, such as dividend payments and cost of carry.
We have offices across 14 countries and more than 86,000 active clients worldwide (2017-18).
Retail client money is held in segregated client bank accounts in line with regulatory obligations.
Listed on the London Stock Exchange and founded nearly 30 years ago, we’re an established industry pioneer.
Open a spread betting account on your iPhone, iPad, Android device or desktop computer to start trading on our award-winning platform and apps now*.
*Awarded Best Platform Features, Best Mobile Phone/Tablet App, ranked highest for Charting and Spreads, based on highest user satisfaction among spread betters, CFD and FX traders, Investment Trends 2018 UK Leverage
**A minimum spread is the lowest spread that will be shown for an instrument. If the underlying market spread widens throughout the trading day, or you are trading out of hours, the platform spread may also widen. The spreads shown are for the first price available for the average market trade/bet sizes in the relevant instrument. The spread will widen for larger trade/bet sizes; see our platform for more information. This data is provided for general information only and may not be current. Please refer to the product overview area of our trading platform for real-time information on the spreads, margin rates, commission (as applicable) and trading hours of a particular instrument. Please note that the change in price that results in a P&L change equal to your stake size is represented by the last large digit in the price shown on the platform.
^Conditions apply.
