Lowest spreads in spread betting: A 2026 comparison
In 2026, finding the lowest spreads in spread betting requires comparing FCA-regulated brokers like Pepperstone, CMC Markets, and IG. For index traders, CMC Markets often leads with spreads as low as 0.4 points on the FTSE 100, while Pepperstone is favored for EUR/USD. Beyond the headline spread, traders must also account for tax status and overnight funding costs to calculate their true total cost.
For UK-based traders, spread betting remains a highly efficient vehicle due to its status as a tax-free activity (exempt from both Capital Gains Tax and Stamp Duty). However, the lack of commission on trades means that brokers generate their revenue by widening the 'spread'—the difference between the buy and sell price. Over thousands of trades, even a 0.1 point difference in the spread can significantly impact net profitability. We examine the current market landscape for the lowest spreads on the FTSE 100 and EUR/USD.
Understanding spread mechanics
In spread betting, your 'cost to trade' is paid upfront. If the FTSE 100 is trading at 8,000.0 and the broker's spread is 1.0, you might see a quote of 7,999.5 to sell and 8,000.5 to buy. To break even, the market must move in your favor by the width of that spread.
It is important to distinguish between fixed spreads (which remain constant during market hours) and variable spreads (which tighten during high liquidity and widen during volatile news events). Most professional-grade brokers now use variable spreads to offer tighter pricing during the London and New York sessions.
2026 Spread comparison: Top providers
We have monitored the average live spreads across the four most prominent FCA-regulated providers.
1. Pepperstone (Best for raw spreads)
Pepperstone has gained a reputation for providing institutional-grade liquidity to retail traders. Their 'Razor' account structure is particularly competitive for those who prioritize raw pricing.
- EUR/USD Average: 0.6 – 0.8 pips
- FTSE 100 Average: 0.8 – 1.0 points
- Verdict: Excellent for scalp traders and high-frequency automated strategies. Their execution speed minimizes 'slippage,' which is often an invisible cost of trading.
2. CMC Markets (Best for FTSE 100)
CMC Markets offers one of the deepest pools of proprietary liquidity. Their 'Next Generation' platform often provides the tightest spreads on major indices during the European session.
- EUR/USD Average: 0.7 pips
- FTSE 100 Average: 0.4 – 0.5 points (during core hours)
- Verdict: The 0.4 point spread on the FTSE 100 is consistently among the lowest in the industry, making it the preferred choice for index specialists.
3. IG (Best all-rounder and volume-based rebates)
As the largest spread betting provider, IG offers massive liquidity and a reliable execution engine. While their standard spreads are competitive, their value proposition increases for high-volume traders through their 'Cashback' program.
- EUR/USD Average: 0.6 pips
- FTSE 100 Average: 1.0 point
- Verdict: While the FTSE spread is slightly wider than CMC, IG’s reliability and depth of market make them the benchmark for professional retail traders.
4. City Index (Best for fixed spreads)
City Index often appeals to traders who prefer predictability. They offer competitive fixed spreads on certain instruments, which can be advantageous during volatile market openings.
- EUR/USD Average: 0.7 pips
- FTSE 100 Average: 1.0 point
- Verdict: A solid choice for those who want to know their exact cost of entry regardless of short-term market fluctuations.
The 'Invisible' costs: Slippage and overnight funding
Low spreads are only one part of the cost equation. Two other factors can erode your capital:
- Slippage: This occurs when your order is filled at a worse price than requested. This usually happens during high volatility. Brokers with 'Direct Market Access' (DMA) or superior Tier-1 liquidity providers generally have lower slippage rates.
- Overnight Funding: If you hold a spread bet past 10:00 PM UK time, you will pay (or occasionally receive) interest. This is typically calculated as LIBOR (or equivalent) +/- 2.5%. For long-term 'buy and hold' positions, these daily fees can eventually exceed the cost of the initial spread.
Summary for 2026
For active day-trading of the FTSE 100, CMC Markets currently offers the lowest cost of entry with their 0.4 point spread. For Forex (EUR/USD), Pepperstone and IG are neck-and-neck, with Pepperstone offering a slight edge in execution speed. We recommend traders maintain accounts with at least two providers to take advantage of pricing discrepancies and to ensure redundancy in their trading infrastructure.