Spread betting or a spread bet is a leveraged financial derivative. Spread betting is ‘betting’ on the direction you think a market will go. The accuracy of your bet will determine whether you will win or lose once your position is closed.

When you open a spread betting position, you decide how much you want to bet on the price change of a financial security. Long positions generate profits when the market price rises, short positions in turn when the market price falls. The profit or loss of your position is calculated as follows:

Win or Loss = (£ bet per point x points moved) – charges to open and maintain position

Since spread bets are a leverage product, you only deposit a fraction of the total position value when you open it. The margin required depends on the underlying market and the size of the bet.

If you want to start with spread betting on cryptocurrency, the first step is to choose a spread betting broker that you like. The following article provides an extensive overview of some of the best spread betting brokers, as well as the information you need to make an informed decision.

Spread Betting Statement

Spread betting is a form of speculation that is simply about placing a bet on the price of a financial instrument. Your profit or loss will depend on whether the price moves in the direction you want.

In contrast to other forms of trading, the Spread Better never owns the underlying asset. You just speculate on whether the price will go up or down. Spread betting allows you to trade with leverage, which means that as a trader you can trade on margin. So you only need a small deposit to be able to open positions with larger amounts.

What is spread betting trading?

Spread betting involves speculating on the market fluctuations of an investment. Essentially, you are betting on whether the price of that asset (in this case, a cryptocurrency like Bitcoin) will go up or down against the bid and ask prices provided by a spread betting broker.

How does crypto betting work?

Once you’ve selected a spread betting broker, log into your account and choose the cryptocurrency you want to speculate with. From there, check the listed buying and selling prices and decide whether you want to bet on the rising or falling price of the cryptocurrency.

Spread betting vs. CFD trading

Spread betting and CFD trading are similar practices. There are a few differences, however. Let’s review how each approach works.

Spread betting. This is a form of derivatives trading. You can use leverage in both spread betting and CFD trading. When trading with leverage, you only need to deduct a fraction of the total value of the deal. In both spread betting and CFD trading, you can bet that the price of an asset will either go up or down. A big advantage of spread betting over CFD trading (if you are based in the UK, for example) is that spread betting in the UK is exempt from capital gains tax, while CFD trading is not.

CFD trading. A contract for difference (CFD) is an agreement between a buyer and a seller that obliges the buyer to pay the seller the difference between the current value of an asset (in this case a cryptocurrency) and its value at the time the contract was signed.

What should I watch out for with a spread betting service?

Find a Regulated Platform – The Financial Conduct Authority (FCA) oversees and regulates most reputable spread betting brokers in the UK. Whichever cryptocurrency spread betting platform you choose, make sure it is regulated by the FCA.

Variety of Payment Methods – Choose a spread betting platform that allows you to deposit and withdraw funds in the manner that best suits your needs. Bank transfers are a common method of funding spread betting accounts, but some platforms accept newer payment methods, such as cryptocurrency.

Appropriate deposit and withdrawal limits – Various spread betting platforms offer deposit and withdrawal limits. Choose a spread betting platform that is suitable for the volume of trade you want, whether it is small bets or trades of much greater value.

Good Reputation – User ratings are often the best way to gauge the reputation of a spread betting platform. Take the time to review these reviews so you know that the platform you choose ticks all the boxes, from customer service to design and usability.

Design and Ease of Use – Speaking of design and ease of use … UX is an important factor to consider when choosing a spread betting platform. The better the design of a platform, the smoother your user experience will be. Quick and easy to use are especially valuable factors when the moment of truth comes and you are ready to place a bet.

Variety of Cryptocurrencies – Whichever spread betting platform you choose, make sure it offers the variety you want. Most platforms have crypto options that go far beyond the capabilities of Bitcoin.