When you place a financial spread bet on a share, you are exempt from UK Stamp Duty. This is because you do not take ownership of the share itself, instead placing a bet on which way its price will move with no physical exchange of shares taking place.
Stamp Duty of 0.5% is currently payable whenever you purchase UK shares, so if you are buying and selling shares regularly or trading for short periods of time, these costs can become significant. As a spread bet of £1 per point movement in a share produces almost identical exposure as buying or selling approximately 100 physical shares, spread betting offers you the opportunity to profit from movements in share prices, without paying stamp duty.
Spread bets are high-risk products; you need deposit only a small percentage of the value of the bet. However, your losses may substantially exceed that deposit very rapidly and thus require you to make additional deposits at short notice to maintain your bets. Spread bets are not suitable for all customers. Before betting, you should ensure you fully understand the risks and seek independent financial advice if necessary.
Cantor Index Limited is authorised and regulated by the Financial Services Authority, FSA register number 194414.
These products are not intended for people under the age of 18 or for US residents.
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