Interactive Brokers is among the most established and technically capable brokers available, operating since 1978. It suits experienced traders while also offering simpler entry points for newcomers, with access to a wide range of assets across global markets.
If you are reading this, you are likely interested in spread betting, a leveraged derivative that magnifies both gains and losses. It is a high-risk product available in only a handful of jurisdictions – principally the UK and Ireland – and prohibited in the US.
So can you spread bet through Interactive Brokers? Below we explain what spread betting is, its advantages and drawbacks, whether IBKR supports it, and which alternatives do.
Spread betting is a leveraged product carrying a high risk of rapid loss. The majority of retail investor accounts lose money trading these instruments.
Does Interactive Brokers offer spread betting?
No, Interactive Brokers does not offer spread betting. IBKR provides a broad derivatives range including futures, options, and CFDs, but spread betting is not among them, and the company has announced no plans to add it.
The closest equivalent available at IBKR is CFDs. Like spread bets, CFDs let you take a position on price movements without owning the underlying asset, settling the difference between the opening and closing price.
There are meaningful differences between the two, though:
- Position sizing: with a CFD you trade a number of units or contracts. With a spread bet you stake an amount per point of price movement, so your profit or loss is the price change multiplied by your stake;
- Costs: CFDs typically carry an explicit commission on share trades alongside the spread. Spread betting is usually commission-free, with the provider’s margin built entirely into a wider spread;
- UK tax treatment: this is the decisive difference for most users. Spread betting profits are generally free from capital gains tax and stamp duty for UK residents, whereas CFD gains are subject to CGT. That said, losses on spread bets cannot be offset against gains elsewhere, and tax treatment depends on individual circumstances and can change.
If you are considering CFDs instead, bear in mind they are complex instruments unsuitable for many investors. Your capital is at risk and you should never trade money you cannot afford to lose entirely.
Futures are another IBKR instrument with some similarity, involving an agreement to buy or sell an asset at a set price on a future date. The key distinction is settlement: some futures contracts can require physical delivery of the underlying asset, whereas spread bets always settle in cash.
Interactive Brokers alternatives for spread betting
Pepperstone
Founded in 2010 in Melbourne, Pepperstone now serves over 900,000 traders across 12 global offices. The platform covers forex, indices, commodities, shares, ETFs, and cryptocurrencies, with spread betting available to UK clients. It is regulated by the FCA in the UK, with FSCS protection up to £85,000, alongside ASIC, CySEC, BaFin, and DFSA elsewhere. US clients are not accepted. Pricing is competitive, with platform choice across MT4, MT5, cTrader, and TradingView. Read our full Pepperstone review for more detail.
CFDs and spread betting are complex instruments and come with a high risk of losing money rapidly due to leverage. 73-89% of retail investor accounts lose money when trading these products with Pepperstone.
FxPro
An FX and derivatives broker founded in 2006, regulated by the FCA (UK), CySEC (Cyprus), FSCA (South Africa), and SCB (Bahamas). FxPro offers spread betting across 430+ underlying instruments with no commission, though this requires an FxPro EDGE account, available only to UK residents. UK clients are covered by FSCS protection up to £85,000.
IG
Founded in 1974, IG is widely credited as the world’s first spread betting firm and remains the largest provider in the market. Its platform covers an extensive instrument range including forex, shares, commodities, cryptocurrencies, bonds, ETFs, and derivatives, with no minimum deposit.
While IG’s fees on share dealing and CFDs sit at the higher end, spread betting carries no commission, with costs built into the spread. IG is regulated by multiple top-tier authorities including the FCA, FINMA, BaFin, ASIC, and MAS, and is listed on the London Stock Exchange as a FTSE 250 constituent – a useful signal of financial disclosure and stability. UK clients benefit from FSCS protection up to £85,000.
Pros and cons of spread betting
Pros
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You are not limited to betting on the rise of prices. If you expect the price of a stock to fall, you can also bet on it to fall and profit from it.
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You will be able to gain full exposure to the asset without acquiring its ownership and paying the full price. This is positive because your initial investment will be lower than it would be if you were to acquire the asset.
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Spread betting is considered gambling in many jurisdictions, including the UK, where the instrument is used the most. Since it is a speculative bet, it is tax-effective, and it will not be not taxable as capital gain or income.
- Generally, spread betting does not have a commission or dealing fees. Only the spread is charged from the client.
Cons
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This type of financial instrument is highly speculative and extremely risky. Its leverage effect magnifies volatility and potential losses, which can be unlimited without a stop loss position.
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Losses incurred may not be tax-deductible for the same reasons that the investment may be tax-effective.
- Since you cannot acquire the ownership of the underlying asset, spread betting does not conceive voting rights or similar ones.
Key points to consider when choosing a spread betting broker
Having covered the alternatives, here are the factors worth weighing when selecting a provider:
- Spreads: spread betting accounts are typically commission-free, with the provider profiting from the gap between bid and offer. That makes the spread your primary cost, so compare it across the instruments you actually intend to trade. Note that spreads widen during volatile conditions and outside main market hours;
- Regulation: verify the provider is authorised by the FCA and check whether FSCS protection up to £85,000 applies to your account. This covers provider failure, not trading losses;
- Risk management tools: check whether guaranteed stop losses are offered. Standard stops can slip in fast-moving markets, whereas guaranteed stops hold your exit price – usually for a premium. Also confirm negative balance protection is in place, which prevents you owing more than your account balance;
- Instrument range: since the underlying asset drives your outcome, a broader range gives you more scope, though it is worth being disciplined about trading only what you understand;
- Platform and execution: reliability matters more than features. A platform that fails during a volatile session can be materially costly on a leveraged position;
- Customer support: responsiveness and availability during the hours you trade.
Bottom line
Interactive Brokers is one of the most established brokers available, with an exceptional range of instruments, but it does not offer spread betting and has signalled no plans to add it. If spread betting specifically is what you need, the alternatives above – Pepperstone, FxPro, and IG – all provide it to UK clients under FCA regulation.
A word of caution before you proceed. Spread betting is among the highest-risk products available to retail investors. Leverage magnifies losses exactly as it magnifies gains, and the published figures are stark: the majority of retail accounts lose money trading these instruments, typically between 70% and 90% depending on the provider. The tax advantage in the UK is real, but it only matters if you are profitable, and most people are not.
If your objective is building wealth over time rather than short-term trading, spread betting is the wrong tool. A diversified portfolio of low-cost index funds held within a Stocks and Shares ISA delivers the same tax-free treatment on gains, without the leverage that makes spread betting so unforgiving.
This article is for informational purposes and does not constitute financial advice. Do your own research and due diligence, particularly with an instrument carrying this level of risk, and never trade money you cannot afford to lose.
FAQs
What is Interactive Brokers?
Interactive Brokers is a well-established trading platform founded in 1978. Using their services, you can trade stocks, bonds, ETFs, forex, funds, commodities, futures, options and even cryptocurrency derivatives. On top of this, if you decide to use it, it provides a great referral system, where you can earn up to $1000 by doing a referral!
Interactive Brokers operates worldwide and has attracted wealthy investors over its years of service. Their platform gives you access to 150 market destinations in 33 countries, you can trade many different financial instruments, including derivatives. Although you can find CFDs or futures among the long list of tradable financial instruments, you cannot find spread betting services on the Interactive Brokers platform.
What is spread betting?
Spread betting is a derivative: a contract whose value comes from an underlying asset, like currencies or stocks. Derivatives are frequently used to hedge positions or gain leverage and speculate about the price of the underlying asset.
In a nutshell, spread betting is a contract that allows investors to bet on the price movement, both up and down, of an underlying asset. At the end of the contract, the profit or loss is calculated by taking the change in the price of the asset (initial price – final price) and multiplying it by the amount of cash that the investor placed in the bet.
When spread betting, you do not acquire the ownership of the underlying asset, and leverage your position. This makes this type of investment risky, since you will gain full market exposure to the underlying asset, while investing only a fraction of the price, magnifying your profit and loss.
To illustrate this explanation, imagine the following: let’s say that you think that a stock that currently costs $100 is overvalued. You believe that its price will fall. Then you decide to bet $10 that the price will fall below $100. If, at the closing of the contract, it reaches $95, you will close the contract with the profit of $50 {($100 – $95) * $10}. On the other hand, if the price goes up to $105, you will close the contract with a loss of $50 {($100 – $105) * $10}.
