Sharing the center stage with forex and CFD trading in recent years has been financial spread betting, helped on in massive part by growing interest in online trading amongst retail investors. Both forex and spread betting are regarded is risky but potentially lucrative ways to generate a return from the markets, and while both deploy a degree of leverage, albeit in different ways, their characteristics remain largely unique.

Forex trading means speculating on the value of a currency with the belief that the currency will rise or fall against another. For many currency traders forex spread betting is a convenient and tax-free way to trade their chosen currency pairs. In a forex trade, you buy (go long) one currency while simultaneously selling (going short) of another.

Spread betting is a derivative strategy, where participants do not actually own the underlying asset they bet on, such as a stock or commodity. Rather, spread bettors simply speculate on whether the asset's price will rise or fall using the prices offered to them by a broker.