The short answer is: tax reasons. Current UK tax law allows winnings from bets such as the lottery, horse racing and spread betting to be free of capital gains tax. A lot of people confuse spread betting with gambling simply because of the word ‘betting’. Technically, it is a bet that you are placing and technically spread betting firms are bookmakers. But spread betting firms simply provide a price at which you can trade UK shares and global financial markets in the same way that a traditional stock broker does. Of course there are differences, which we will explore in later sections. My personal view of spread betting is that it is the best entry level product for new and intermediate traders in the UK because the costs are low (No commissions), spread betting firms are regulated under UK law, profits are free of capital gains tax and you can go short (make money from shares going down in value), unlike traditional share trading.

“When you open a spread bet, you do not actually own the shares”