What spread betting really costs
No commission doesn't mean no cost. Spread betting's charges are quieter than share dealing's — built into prices rather than itemised on statements — which is exactly why they're worth totting up before you trade.
The spread: a charge on every single trade
You buy at the higher price and sell at the lower one, so every position starts the spread's width offside. On the FTSE 100 at a 1-point spread and £2 per point, that's £2 per round trip — trivial once, but it scales with frequency, not with success. Trade twenty times a week and the spread alone is costing around £200 a month at that stake. This is why overtrading quietly empties accounts that never took a big loss.
Overnight financing: the cost of holding
Daily rolling bets are charged financing each night they're held. The formula is simple: notional exposure × (benchmark rate + provider's markup) ÷ 365 for long positions — providers publish their markup, commonly in the 2–3% region on top of a benchmark such as SONIA. For illustration, at a combined 6% annualised a £2/pt FTSE position (£21,300 of exposure) costs about £3.50 a night — roughly £24.50 a week, £105 a month. Short positions mirror the sum (benchmark minus markup), which can even produce a small nightly credit when rates are higher than the markup. Either way: the longer you hold, the more the spread stops mattering and the financing takes over.
Daily rolling or quarterly?
Quarterly bets build their funding into a wider spread instead of charging nightly — more expensive to open, nearly free to hold. The break-even arrives after a few weeks, which is why short-term traders roll daily and position traders should price up the quarterly before defaulting to rolling.
Guaranteed-stop premiums
The only stop that caps a gap is a guaranteed one, and providers charge for it — a wider spread on the position or a fee if the stop is triggered. It's insurance: usually not worth it intraday on a liquid index, often clearly worth it holding shares through earnings or anything over a weekend. Our stop-losses guide covers when the premium earns its keep.
What you don't pay
No commission at most providers, no 0.5% stamp duty (you never buy the shares), no Capital Gains Tax on profits under current rules — and because bets are priced in pounds per point, there's no currency conversion on non-UK markets, a quiet advantage over CFDs.
The small print worth reading
Check the charges schedule for inactivity fees (some firms charge dormant accounts after a year or two), market-data fees on certain share feeds, and premium platform tiers. None are scandalous; all are findable in ten minutes before you deposit rather than discovered on a statement afterwards.
Rough total for a typical beginner: the spread × how often you trade, plus financing × how long you hold. Run both through the calculators before the first real bet.