Leading CFD forex trading broker Pepperstone also offers spread betting. With 60+ forex pairs, low spreads, MT4, MT5, and cTrader trading platforms we review Pepperstone spread betting for the UK.
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Our review of Pepperstone in UK found they are one of the best forex brokers for trading CFDs. This Award-winning CFD broker Pepperstone enjoys a global reputation as one of the world’s best online brokerages for forex traders. For UK account holders, however, the institution offers an additional way to play the markets: spread betting.
Below, you’ll find our review of Pepperstone’s spread betting accounts and platforms.
Pepperstone was founded in 2010 to provide traders with access to CFD financial instruments like forex, indices, commodities, cryptos, and shares. The broker was founded on the belief traders should be able to trade with low costs using leading trading platforms and fast execution speeds backed with best-in-class customer service. From its beginnings as an Australian-centric broker, the company has grown with offices in 6 different countries, including London for UK traders.
Key Strengths as a broker:
A Pepperstone spread betting account has much in common with the broker’s CFD offering, with the exception of a slightly higher fixed spread. Like the Razor and Standard accounts, the spread betting account operates on a no-dealing desk model with straight-through processing (STP).
Like Pepperstone’s Standard account developed for CFD traders, the broker’s spread betting account operates on a no-commission basis. Since the brokerage relies on a minimum spread to generate fees, the spread is widened but only by a small amount.
To spread bet with Pepperstone, you can choose between MetaTrader 4, MetaTrader 5, and cTrader. All are good choices, choosing MetaTrader 4 for spread betting will allow you to automate using Capitalise.ai, while MetaTrader 5 will allow you to bet using shares.
For spread bettors focused on the currency markets, Pepperstone offers the option to enlarge your position with leverage. The available margins – 30:1 for major pairs and 21:1 for minor pairs – line up with the maximum permitted under UK law. All bettors will also receive negative balance protection which is also required by the FCA,
Trading Products And Minimum Spreads
Pepperstone’s spread betting account offers variable spreads that start from 0.7 pips. Forex enthusiasts take note: our research shows that Pepperstone’s spreads for popular currency pairs, while competitive as compared to other brokers, can reach as high as 1.3 pips.
That said, we found that Pepperstone’s variable spreads tracked (if not beat) those of other top brokers with licenses from tier-1 regulators. This can be attributed to the broker’s deep pool of tier-1 liquidity providers the broker sources their quotes from, along with no dealing desk and straight-through processing (STP) execution policy. With such low spreads, Pepperstone is one of the best brokers for spread betting.
You can bet on the same products Pepperstone offers for CFD trading, these include forex, stocks, ETFs, indices, and commodities. Blue chip stocks carry a markup of 0.8 pips in addition to the market spread while gold has a minimum spread of 0.05.
Cryptocurrency trading is also available but only if you have a Professional trading account.
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Yes, one can bet using the maximum allowable leverage permitted by the UK’s financial regulators – the Financial Conduct Authority (FCA). These leverage levels are the same as for CFD traders.
Leverage levels for retail traders are more conservative being limited to 30:1 for major currency and 20:1 for minor and exotic pairs. Retail traders cannot bet on cryptos.
Traders with a Professional account can spread bet forex up to 500:1, regardless of the currency pair being used.
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We opened test accounts with Pepperstone for CFD trading and spread betting and found the process admirably straightforward in both cases. As the CFD trading account doesn’t require users to make additional or agree further terms and conditions it requires slightly less effort.
Remember, to open a spread betting account with Pepperstone you must provide proof of residence in the UK and identify the Financial Conduct Authority (FCA) as your regulator during the verification process. Provided you meet the requirements, Pepperstone will contact you with an invitation to create a profile and open an account.
Step 1: Request an Account
After logging in, click the blue “Request an Account” button in the upper right corner of your screen.
Step 2: Choose Your Account Type
If you’ve provided the correct documentation and selected the UK’s FCA as your regulator, you should see a “Spread Betting” option in the “Account Type” dropdown. Once you’ve indicated that you’re opening a spread betting account, you’ll need to read and agree to Pepperstone’s T&Cs.
Step 3: Choose Your Platform
When prompted, select the trading platform best suited to your experience level and needs. Note that Pepperstone offers only a limited version of TradingView not suitable for spread betting.
Select “Spread Betting” from the second drop-down menu and “GBP” from the third to nominate your account in the correct currency.
Step 4: Submit
Once you’ve agreed to spread betting-specific terms and conditions, select your preferred platform and set a password, you should be all set. Click the blue ‘submit’ button in the bottom right corner of the screen to access your new spread betting account.
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Before opening a retail investor account with Pepperstone, you’ll want to understand the range of features available and the trading costs associated with each type of trading account. Spread betting isn’t the only option, CFD trading is another way to use your funds.
That said, Pepperstone clients benefit from tight spreads, whether trading on a Standard or a Razor account. Both account types use a no-dealing desk execution model with straight-through processing (STP), which means you’re less susceptible to slippage. Finally, both Standard and Razor account holders can deploy scalping and hedging strategies and automate their trading, if desired.
Pepperstone does not require a minimum deposit to open an account and does not charge customers for making deposits.
Pepperstone Standard Account for CFD Trading
Pepperstone’s introductory trading account offers variable spreads starting at 0.6 pips but charges no commissions. Customers in majority-Muslim countries have the option to trade or bet via a ‘swap-free’ Islamic account.
Interested in commission-free trading? You’ll need to open a Razor account dedicated to CFDs and other derivatives.
Pepperstone Razor Account for CFD Trading
The Pepperstone Razor account has tight spreads starting as low as 0.0 pips but charges a £4.50 commission to MetaTrader 4 and 5 users. cTrader traders will pay USD$ 6.50 converted into the account base currency.
This account type is not available as ‘swap-free’, regardless of the customer’s location.
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If you opt for Pepperstone as your broker, you’ll have access to a broad range of markets on which to bet or trade. In addition to forex, you can open positions on
Pepperstone offers spread bettors a choice of some of the best trading platforms, each with its own set of trading tools suitable for specific trading strategies.
All platforms are available via Windows as a desktop model and are also the top options as a mobile app for spread betting with iOS and Android. You can also trade with their Web Trader versions via any browser.
1. MetaTrader 4
Designed with forex traders in mind, MT4 offers a comprehensive suite of advanced trading tools, including:
Pepperstone account holders opening positions through MetaTrader 4 also have access to a Figaro integration for more advanced charting, currency strength comparisons, quote boards, and market scanning technology. Capitalise.ai allows automated betting.
Because the platform caters to forex specialists, you may want to look elsewhere if you intend to place bets on other assets and instruments.
2. MetaTrader 5
MT4’s younger sibling was created to give users access to centralised exchanges and a broad range of tradable assets. In addition to forex, users can trade in equities, CFDs, and futures.
Among the platform’s selection of trading tools, you’ll find:
Pepperstone account holders who opt to place bets using MT5 will also have access to a Figaro integration, but not Capitalise.ai
3. cTrader
Ideal for beginner traders and those new to spread betting, the cTrader platform mimics an institutional trading environment. That means enhanced stability in the trading environment and a user-friendly interface.
More experienced traders will appreciate the impressive range of available tools and customizations, such as:
Spread betting allows traders to profit from volatility in the financial markets without the risk of exposure to the underlying asset. Rather than earning a profit from buying low and selling high, spread bettors make money by correctly predicting whether the price of a specific tradable product will rise or fall. With this in mind, Forex spread betting means you are betting on movements in currency pairs without owning the underlying instrument.
Example: Tom believes that the price of shares in Company X will increase following its upcoming shareholders’ meeting. Logging into his trading account, Tom sees that his broker has set the spread at £0.10 per share. He decides to bet £15 per point on a rise in Company X’s share price. To control risk, he sets a stop loss at £30.
If Tom correctly predicts the direction of the market and the price of Company X climbs from £10 to £10.50, he’ll make a profit of £75 (5 points x £15 per point). But what if the price goes down instead? If Company X shares fall to £9.50 from £10, Tom loses £75. Fortunately, he used a stop loss to manage his risk. Once the price falls below £9.80, his platform will immediately close his position (2 points x £15).
Spread betting differs from trading CFDs in three key aspects:
Both spread betting and trading CFDs allow you to make money in the markets without the risk associated with actually purchasing the underlying asset. However, there are differences between CFDs or Forex Trading and Spread betting. In the case of CFDs you buy and sell the actual contract for difference, much as you would shares of stock or currency. In spread betting, you only need to correctly predict whether the price of the asset will rise or fall.
Similarly, you can use leverage to increase the size of your position when spread betting and trading CFDs. The Financial Conduct Authority (FCA) sets higher margin limits for some types of trading activity than others, however. Spread betting leverage is capped at 30:1, while margins for some currency pairs top out at 20:1.
The most important difference between CFD trading and spread betting? Taxation. Because spread betting involves significant risk, HMRS treats these profits as tax-free gambling winnings. Successful CFD traders, on the other hand, need to hold back enough money to cover capital gains taxes and stamp duty taxes.
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Ready to begin spread betting? If you are a beginner to the world of spreads betting then follow these seven steps to ensure you’ve covered all your bases.
1. Choose a spread betting broker. We strongly recommend that you place bets through an FCA-regulated broker like Pepperstone. Trading with a licensed, regulated broker won’t protect you from loss, but it will prevent market manipulators and fraudsters from misusing your funds.
2. Fund your spread betting accounts. Most reputable brokers will allow you to choose from several funding options, including MasterCard and Visa credit and debit cards; bank transfers; and PayPal. Only bet money that you can afford to lose.
3. Choose your spread betting platform. Your broker may offer several different platforms to place your bets or execute traders. Review the key features of each platform carefully before choosing to ensure that you’ll have access to all the tools you need to support your strategies for spread betting.
4. Pick a financial instrument on which to bet. Unless you intend to only place small bets without leverage, we suggest sticking with familiar assets and markets. If you trade forex CFDs, for example, it makes sense to place bets on currency market movements.
5. Place your bet. The moment of truth! If you think the market will go up, place a ‘buy’ bet with your broker. Foresee a downturn? Place a ‘sell’ bet.
6. Monitor the market. Even if you’re using stop loss or limit orders to protect your investment, you’ll want to keep an eye on the market to see how accurately you predicted the market. Did it rise as high as you anticipated? Drop lower than you thought it would? You’ll need this data to refine your strategy.
While we can’t guarantee that following our process will lead to success in spread betting, it does cover all the factors you need to consider to set yourself up for success.
How We Researched
To identify the best spread betting brokers we consider a number of factors, including:
The team at Compare Forex Brokers has years of experience in retail investing and personal finance. We’re also entirely independent and reader-supported, which means we’re not financially beholden to any of the brokers we review.
While spread betting offers the opportunity for significant profits, it can also result in substantial losses. Research the potential costs and benefits before opening a position and only place bets through a regulated broker licensed to operate in your jurisdiction. Unlicensed brokers are not subject to government oversight and may engage in fraudulent activities or mismanage your funds.
Never invest more than you can afford to lose and educate yourself on risk management strategies and tools. Most spread bettors lose money. Always seek professional financial advice before making any investment decisions.
