Compare the best commodities spread betting brokers

Before you start spread betting on commodities online it’s wise to pick a broker that matches your needs. To do that you’ll need to decide what those needs are. Which is where we come in. Read on to learn about the best trading platforms for spread betting commodities and then, when you’re ready to get started, learn how to choose one.

Where can I find the best trading platforms for spread betting commodities?

Right here. We’ve done all the legwork and compared all the options so you’ll be well informed when deciding which spread betting platform to use.

1
Min. Deposit
$50
Exclusive promotion
User Score
10
Trade/invest in stocks with just $50
Invest for dividends and get payout on stocks on Ex-Dividend day
Over 11 payment methods, including PayPal
Start Trading
Description:
eToro is a multi-asset investment platform with more than 2000 assets, including FX, stocks, ETF’s, indices and commodities. eToro users can connect with, learn from, and copy or get copied by other users. Buying stocks on eToro is free and you can invest with as little as $50.
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro. Your capital is at risk.
2
Min. Deposit
$1
Exclusive promotion
User Score
9.3
0 Commissions and no deposit minimums
Registered with and regulated by SEC and FINRA
Loss of cash protection
Start Trading
Description:
Financial company driven by technology and offering all-in-one self-directed investment platform that provides excellent user experience.
Payment Methods
Full regulations list:

What is spread betting?

Spread betting is a practice that involves speculating on the price of an asset (such as a commodity). In essence, the spread bettor is betting on the rise or fall of an asset’s value based on the bid and ask prices quoted. 

How does commodity spread betting work?

As the bettor, you simply log into your account, select the commodity you want to speculate on, take note of the quoted buy and sell prices, and decide whether you want to bet on the price of the commodity rising or falling. 

Spread betting vs. CFD trading

There are many similarities between spread betting commodities and CFD trading, but there are also significant differences. Let’s review how each approach works.

  • Spread betting. This is a form of derivatives trading. In both spread betting and CFD trading, bettors can use leverage, which means they only need to put down a fraction of the money for the total trade. Also, in both spread betting and CFD trading, participants can choose to bet on the price of an asset going up or down. The biggest advantage that spread betting holds over CFD trading is that, in the UK, spread betting is exempt from capital gains tax, while CFD trading is not. 
  • CFD trading. A contract for difference (CFD) is an agreement between a buyer and seller that requires the buyer to pay the seller the difference between the current value of an asset and its value at contract time. Perhaps the most significant difference between CFD trading and spread betting (aside from spread betting’s aforementioned tax benefits) is that spread betting is predominantly available in the UK and Ireland, but is now starting to also come up in countries like Sweden, while CFD trading is available around the world. Also, you’ll need a CFD broker account.

So I don’t technically ‘own’ the assets I’m trading on a spread betting platform?

Correct. When spread betting commodities, you’re betting on the price of an asset going up or down, without actually owning the commodity asset. This means you don’t have to deal with the hassle, worry and expense of keeping your assets safe. It also means you can trade faster and take advantage of market fluctuations to carve out gains.  

What should I look for in a spread betting service?

  • Find a regulated platform – In the UK, the Financial Conduct Authority (FCA) leads a group of five major regulators that oversee most reputable UK spread betting brokers. Make sure the service you pick is regulated by the FCA and other regulatory bodies.
  • Variety of payment methods – Make sure you select a spread betting trading platform that allows you to deposit and withdraw funds in a way that fits your needs. In addition to typical methods, such as bank transfers, some platforms offering spread betting commodities will now even accept deposits in cryptocurrency.
  • Suitable deposit and withdrawal limits – Deposit and withdrawal limits will vary from platform to platform. Make sure you pick one that suits the the level of trading you want to do, whether it’s small commodity bets or big trades that require a serious bankroll.
  • Good reputation – User reviews, media coverage and awards can all be good gauges of reputation. Do your research to find somewhere that ticks all the boxes.
  • Design and ease of use – Don’t overlook design and ease of use when picking a commodity spread betting trading platform. Speed of navigation can be a decisive factor when you need to act quickly, and a badly designed platform can make the whole process unnecessarily complicated.
  • Variety of commodities – There are many different commodities out there. Make sure the platform you select offers a comprehensive variety of commodities.

What are the tax laws on spread betting profits?

In the UK, spread betting is exempt from both capital gains tax and stamp duty. That gives it an advantage over CFD trading, stock investing and other trading methods.

Is online commodity spread betting secure?

When it comes to security, spread betting is no different from CFD trading, stock market investing or other trading methods. As long as you choose a reputable, regulated trading platform, your trades will be secure. Use our reviews to find the best ones.

Can I bet on multiple assets?

Yes, you can bet on multiple assets. The bonus is that you won’t need to store any of those assets, since you won’t actually own the commodities you’re speculating on.

Do spread betting platforms charge fees?

Typically, they don’t charge fees but make money based on the commodity spread itself. If a commodity is normally priced at £100 to buy and £101 to sell, a spread bet might carry quotes of £99 to sell and £102 to buy.

What are the advantages of using a spread betting platform?

They are set up to make the process of spread betting commodities effortless, so you don’t need to do any additional legwork. Simply punch in the commodities you want to bet on and the platform will execute the transaction instantly.

And what are the drawbacks?

Some investors prefer the hands-on feeling that comes with actually owning a physical commodity. If ownership is important to you, you’re better off buying commodities on a brokerage or exchange, rather than spread betting.

Spread betting is also a bit more complicated than simply buying a physical asset at a certain price and selling down the road, so you’ll need a bit more technical financial knowledge in order to take full advantage.

Should I use a spread betting broker?

You’ve read about the pluses and minuses of spread betting on commodities and using the brokers, so at this point the choice is yours. If you want to bet on oil or precious metals quickly and easily, without having to worry about keeping the assets safe from thieves, then spread betting commodities is a great idea.

Hopefully we’ve given you a decent introduction to the fundamentals of commodities spread betting. Check out our top frequently asked questions to delve a bit deeper.

FAQs

ℹ How did spread betting come to be?
ℹ What are some of the assets you can spread bet?
ℹ How long can you keep a spread bet open?
ℹ What’s the built-in risk of spread betting?
ℹ Where can I find tighter spreads then?
ℹ What’s the biggest advantage of trading with leverage in a spread bet?
ℹ What’s the biggest disadvantage of trading with leverage in a spread bet?
ℹ What’s a good way to manage risk when spread betting?
ℹ Is there a way to mitigate that risk with standard stop-loss orders?
ℹ What is spread-betting arbitrage, and is it a strategy worth pursuing?

Fact-checking & references

Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.

Risk disclaimer

Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >

Harry Atkins
Financial Writer
Harry joined us in 2019, drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience in the… read more.