Compare the best commodity spread betting brokers in 2022

This guide rates the best places to spread bet commodities right now. Find what makes a great spread betting broker and compare the best options available.
Updated: Sep 9, 2022

Our experts have tested a wide range of platforms to find the best commodity brokers that offer spread bets. Read on to find which ones came out at the top of our list and why we rated them so highly.

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

Use the platforms below to get started right away. 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
$ 10
Promotion
User Score
10
Up to $240 bonus!
Award-winning trading platform
Regulated and trusted broker worldwide
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA
eToro is a multi-asset platform. 68% of retail investor accounts lose money when trading with this provider. You should consider whether you can afford to take the high risk of losing your money.
2
Min. Deposit
$ 0
Promotion
User Score
9.5
World's biggest online bullion market
High-security vaults based Zurich, London, Toronto, Singapore and New York
Next-day withdrawals
Start Trading
Payment Methods:
Full Regulations:
3
Min. Deposit
$ 10000
Promotion
User Score
9.5
Quotes for precious metals 24hrs
Secure storage in Switzerland
Physical gold and silver (high-quality bullion bars and coins
Start Trading
Payment Methods:
Full Regulations:

How does commodity spread betting work?

Put simply, you place a bet on whether you think the price of a commodity is going to rise or fall. You need a broker to do this, and only a handful of them offer spread betting on the commodities markets. How much money you make depends on the value of your stake multiplied by the number of ‘points’ the price moves. 

A point is a unit of measurement set by the broker and which varies according to the commodity you want to bet on. For gold, a point is usually $0.1, so if you bet that the price would increase at $1 per point and the price did indeed increase by $0.50, you would earn:

Stake = $1

Movement = 5 points (0.5/0.1)

$1 x 5 = $5

Whereas for Brent Crude oil a point is measured in cents/barrel and natural gas in a slightly different way. It’s important you understand how spread bets work before you start, and this is particularly true when it comes to how the bet is measured.

So I don’t own the assets when I trade commodities through a spread betting broker?

Correct. When spread betting commodities, you’re betting on the price of a commodity (like crude oil or natural gas) to go up or down, without actually owning the underlying asset. But this is ideal, because it simply isn’t practical to ‘own’ crude oil or natural gas in the same way you can own a stock certificate.

By using spread bets you can trade the commodity markets without having to worry about owning any of them. It’s one of the simplest ways to get started with commodity trading, as a spread bet is a transaction that’s easy to understand.

What should I look for in a spread betting service?

The most important thing is access to the commodities markets. Spread betting is popular in the UK and Ireland but it can be tricky to find one that offers commodities. When you do find one, here are some things to consider before signing up.

  • Find a regulated platform. In the UK, the Financial Conduct Authority (FCA) leads a group of five major regulators that oversee most reputable spread betting platforms. Make sure the service you pick is regulated by the FCA and other regulatory bodies.
  • Range of commodities available. There are many different commodities out there and they all act very differently. You can trade precious metals, hard commodities, soft commodities, energy commodities, even orange juice. All of these prices act in different ways, so you need to choose a niche, research the market, and then find a broker that offers what you want to bet on.
  • 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.

What’s the difference between spread bets and CFDs?

The biggest difference is the tax implications, as spread bets are normally tax free while CFDs aren’t. Otherwise, there are a lot of similarities between spread bets and CFDs.

However, there are some other reasons you might want to trade the commodities markets by using spread bets rather than CFDs. Here we have broken down the two approaches so you can compare them.

Spread betting

Spread betting is popular in the UK and Ireland, but is not available in many other countries. That means it might not be available where you live, but if you are in the UK you won’t have to pay a Capital Gains Tax on any profits you make. Here are a couple of other benefits:

  • Spread bets are tax free and you don’t have to pay a commission every time you trade. The only cost is in the spread – the difference between the buy and sell price – so the price is always right there in front of you.
  • You can use spread bets to ‘short’ a commodity, which means to bet on it going down in price.
  • You can use leverage to make bigger bets. As spread bets are derivatives (where you bet on the value of an underlying asset, rather than buy the asset itself) you are able to make bets with just a small initial deposit.

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. Here are a few more features:

  • CFDs are much easier to access than spread bets. More brokers offer CFD trading compared to spread betting, particularly when it comes to commodities.
  • You can go long or short a commodity. CFDs are derivatives, just like with spread bets
  • You can use leverage to make bigger trades. Again, just like with spread bets. Just note that you run a high risk of losing money when you use leverage, as your losses are magnified as well as your gains.

What are the tax laws on spread betting profits?

The big advantage of spread bets is that they are generally tax free. This is true in the United Kingdom, for example, where the profits you make from spread betting are exempt from Capital Gains Tax. 

Normally, when you buy and sell financial assets you have to pay tax on the profits. This is not the case with spread bets as they are considered a form of gambling instead. It’s one of the big advantages of spread bets compared to CFD trades.

You should note that the local law where you live might be completely different. Spread betting is banned in many countries (such as the US) and in others it is only available to professional clients, which may have different tax implications. Always check the regulations where you live to make sure you don’t get caught out.

Quick answers to key questions

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 platform, your trades will be secure.

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. You can bet on soft commodities, like coffee, sugar, grains, and livestock, or hard commodities, like gold, silver, and oil. As a general rule, soft commodities are things that you can farm or grow, while hard commodities are defined as things you can mine.

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. The difference in the values is the broker’s profit.

This is also one of the main differences between spread bets and CFDs. When trading CFDs you might have to pay a commission or a fee on every trade, whereas you normally don’t with spread bets.

What are the advantages of using a spread betting platform?

That it gives you access to the global commodity markets and makes the process of spread betting effortless. Many brokers offer futures markets, and a place for trading CFDs, but few offer spread bets as well. You need a specialised broker in order to bet.

And what are the drawbacks?

There is a high risk of losing money if you don’t know what you’re doing. This applies to the entire industry of trading commodities, as it’s a market that moves in a very different way to the stock market, which is more familiar to most investors.

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 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, then spread betting commodities is a great idea.

However, the main decision you need to make is between spread bets and CFDs. There are plenty of advantages to spread bets, but trading CFDs offers many of the same benefits and it is often easier to find brokers that offer them.

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, or use the button below to sign up to a broker right now.

FAQs

Is it legal to spread bet commodities?
What are some of the commodities you can spread bet on?
Can I short commodities markets?
Are spread bets safer than trading commodities futures?
What’s a good way to manage risk when spread betting commodities?

Sources & references
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Harry Atkins
Financial Writer
Harry was a Financial Writer for Invezz, drawing on more than a decade writing, editing and managing high-profile content for blue chip companies, Harry’s considerable experience… read more.
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James is a lead content editor for Invezz. He's an avid trader and golfer, who spends an inordinate amount of time watching Leicester City and the… read more.