Spread betting is a tax-efficient alternative to conventional trading. You can go long as well as short on a wide range of global instruments. This means that if you believe the price of an instrument (for example the UK 100 or US Wall St 30) will rise, you would go long or buy the instrument. If you believe the price of the instrument is likely to fall, you would sell or take a short position. If you were right, you would make a profit, otherwise you would make a loss.

Spread betting is a derivatives product, meaning you don’t physically own the instrument you wish to trade. When you spread bet, you trade on margin. Margined or leveraged trading enables you to take a position by depositing just a fraction of the full value of the instrument you wish to trade. The price of the instrument is derived from the price of the underlying, for example a stock index or currency pair. 

Spread betting is a derivatives product, meaning you don’t physically own the underlying instrument. Instead you take a position based on the direction in which you expect the price of the instrument to move. Margin refers to the funds you need in your account in order to be able to open a position. When you trade a position using leverage, you only need to deposit a fraction of the full value of the trade. Leverage is a double-edged sword. This means that you can make considerable profits if the market moves in your favour. You can, however, incur significant losses just as easily if the market moves against you.

At OANDA, we offer stop-loss orders and guaranteed stop-loss orders to help you mitigate risk. Stop-loss orders automatically close a trade position to restrict losses. You can further protect your losses with a guaranteed stop-loss order (GSLO). By opening a professional account, you can also benefit from extra margin relief on your trades when you qualify.