There is a higher similarity between spread bets and CFDs than spread betting and Forex trading.

On the other side, in spread betting, the potential profits are a lot higher than in Forex trading. One of the biggest advantages of Forex trading is that traders can place Forex trades with small initial investments, and it is a lot less risky than spread betting. On the other hand, Forex trading requires the traders to sell a currency to buy another, and they can only make money if the currency they bought rises against the one they sold.įorex spread betting is a type of trading that allows traders to bet on price fluctuations of currency pairs.

One of the biggest differences between them is that traders who place spread bets do not buy the assets they are betting on, and they can make profits even when the asset falls in price. Spread Betting vs Forex tradingĪlthough some people might think that spread betting and Forex trading are the same thing, they are different types of investing. The unit of movement is measured in points or pips.Īll spread bets have a duration between one day and a few months, but you can also choose to close them earlier or close them later. The bet size is the amount of money you bet per unit of movement. The profits or losses are calculated by multiplying the bet size by the unit of movement of the asset you bet on. And if the asset performed as you speculated, you win that trade. Similarly, buying means placing a bet that the asset will rise. For example, if a trader thinks that the price of a certain asset will fall, he sells that asset, which means placing a bet that the asset will fall in price. Unlike stock trading or Forex trading, spread betting allows traders to make money even when the price of an asset falls.

Instead, they are betting on whether the price will rise or fall. Spread betting is a financial derivative that allows traders to speculate on assets like forex, indices, commodities, or shares without buying the assets.

Online financial spread betting