Spread betting is a derivative that enables speculation on stocks, commodities, indices, forex, and other assets without actually buying them. Traders bet on whether the price will increase or drop.
We spoke to expert traders at Invezz.com and utilized their guide to the best spread betting platforms to supply some commentary: which will show how Pepperstone measures against other leading brokers.
Lowest risk among the best spread betting platforms
Pepperstone is authorized by the FCA and the ASIC. Spreads start at 0 pips. As of September 2022, the broker’s average spread for the EUR/USD pair was 0.17 pips on its Razor account. The total cost reached 0.87 pips when including the fee equivalent of 0.70 pips.
The broker’s Standard account is feeless, and the spread was 0.77 pips on the EUR/USD pair on average as of September last year. Their Active Trader program will rebate a spread portion depending on the respective tier and the monthly trading volume.
Best spread betting platforms by country
Professional traders with a volume of $10 million per month or more are eligible for a rebate in the EU and the United Kingdom. This volume is equivalent to 100 standard lots; they get 5% per lot. Professional traders in Australia need a volume of at least 100 lots to be eligible for the lowest tier.
Comparison of the best spread betting platforms
In this section, we compare Pepperstone to a few other top-grade platforms – Plus500, FxPro, IG, and FXCM.
Plus500 gives users access to more than 2,000 assets, such as precious metals, options, forex, CFDs, stocks, commodities, indices, and ETFs. There is a mobile app as well. Plus500 is popular mainly because of CFD trading. Their EUR/USD spread is 0.8 pips on average.
Clients of FxPro can trade dozens of currency pairs, stocks, and futures. The broker maintains high-security standards by holding user funds in leading international banks. The average spread on EUR/USD is 0.5 pips. FxPro’s lowest spread is 0.1 pips.
IG is a broker with a tradition specializing in CFDs and spread betting. They also allow clients to trade crypto, stocks, forex, and commodities. The average EUR/USD spread is very low: just one pip. The spreads start at 0.6 pips.
Apart from the spread, there is no commission on spread betting. It will incur certain fees if you want to make a spread bet longer. Each asset type comes with a minimum bet size.
This broker has a wide range of trading instruments, such as commodities, stocks, forex, indices, and cryptocurrencies. The spreads start at 1.3 pips, and that’s also the average EUR/USD spread. The broker doesn’t charge any other fees for spread betting.
How to use the best spread betting platforms
Our final section is dedicated to the details of placing a spread bet. You start by selecting an asset to bet on. Then, choose “buy” or “sell.” If you think the price will drop, you choose “sell.” If you think it will increase, you have to choose “buy.”
Choose an amount of money to invest. Don’t deposit more than you can afford to lose. You can add a stop loss or take profit. Take profit automatically closes the bet when a certain profit is reached. The stop loss is similar, except it closes the spread bet when its value drops under a certain level.
You can close each spread bet if you’re happy with the outcome; this is possible at any time. In some cases, it’s better to close it earlier with a more limited profit rather than later, when you could face a loss.