THE CRAFT · CHAPTER TWENTY

Spread betting on individual shares

By the editorial teamReviewed 8 July 20263 min read

Spread betting gives leveraged long or short exposure to thousands of listed companies — with no stamp duty, because you never own the shares.

20%FCA minimum margin

5:1maximum retail leverage

£0stamp duty — you never own the shares

Ex-divdividends adjusted, not paid

How it works

You stake per point (penny) of share-price movement. FCA retail margin for shares is 20% (5:1) — lower leverage than indices, because single stocks gap harder. Buy a share quoted at 250p for £10/pt and your exposure is £2,500 with £500 margin.

Dividends and corporate actions

Long positions are credited (and shorts debited) an adjustment when a stock goes ex-dividend, so you neither windfall nor suffer from the mechanical price drop. Splits and rights issues are adjusted similarly. You get no voting rights — you own nothing.

FIG. 1

You get no dividend — the adjustment just stops the mechanical price drop being a windfall for shorts or a loss for longs.

The single-stock risk

Companies gap on results, downgrades and surprises — straight past ordinary stop-losses. If you spread bet individual shares around earnings, guaranteed stops (wider spread or a premium) are the only true cap on the downside. Small-cap spreads are also far wider than the FTSE-100 names used in adverts.

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