Spread betting holds a number of potential disadvantages over conventional share dealing or fixed odds betting.

Disadvantages over share dealing / financial trading

• If a bet is closed before the make up is declared you pay for the spread a second time.



• Many spread betting markets are very volatile. Unless you place a 'guaranteed stop loss', you can incur very large losses if events go against you.



• Losses cannot be offset against capital gains on other ordinary investments.



• It is less suited to long term investment as additional costs are often incurred each time the spread bet is extended to a new expiry date.



• You have no rights as an investor, including no voting rights.



• You will not benefit from dividends.

Disadvantages over fixed odds betting

• If a bet is closed before the make up is declared you pay for the spread a second time.



• Many spread betting markets are very volatile. Unless you place a 'guaranteed stop loss', you can incur very large losses if events go against you.

More Information:

• Introduction



• Advantages of Spread Betting



• Limiting Your Liability