Ireland Spread Betting

Gains from spread betting are also tax-free in Ireland so this makes this trading instrument a tax-efficient alternative to trading shares and financial markets in Eire. The Irish Financial Services Regulatory Authority has assumed responsibility for regulating spread betting in Ireland since November 2007, when the Market in Financial Instruments Directives were implemented in Member States.

Note that if you are located in Ireland, you won't be able to spread bet with the brokers featured in the Irish press like Davy Stockbrokers, BCP Asset Management, Merrion, Good Body Stockbrokers...etc In such cases you will instead be buying the underlying stock; meaning that you have to come up with the full value of that security, for instance if Stock Y is $5 a share and you buy 1000 shares which costs you $5000. With a spreadbet you can have the same exposure for perhaps $500 initial margin, not the full $5000. So, you will need to set up a spread betting account if you wish to spread bet.

Perhaps unsurprisingly, there is more than one Irish spread betting firm which claims to be the market leader in Ireland. Most spread betting companies like Capital Spreads which cater for the UK market welcome Irish clients, however it is interesting to analyse how some London spread betting providers attempted to expand their operations by setting up a separate office in Ireland (and mainly failed).

The first company in Ireland to provide a spread betting service was Worldspreads which was founded in Dublin in 2000. Originally it was focused on sports spread betting in the UK and Ireland through its SportsSpread brand. It began to acquire clients in both the UK and Ireland and at the end of 2005, the company began providing financial spread betting products online in both Dublin and London under the brand name WorldSpreads. WorldSpreads has since ceased trading.

Delta Index, a privately owned company, was next having launched in 2001 - Delta Index has since merged into Gekko Global Markets.

Ireland's biggest bookmaker, Paddy Power also threw its hat into the Financial Spread Betting ring at one point in 2007 with a partnership with London Capital Group to launch their own offering - albeit they later closed the division when they realised that they would have to inject too many resources to compete with the market leaders.

CMC Markets have also opened an office in Dublin but again they later decided to close it when they realised that the market was too small.

One thing worth mentioning here is that with certain Irish spread betting providers you can trade everything (UK, Irish Stocks, USA stocks...etc) in a Euro denominated stake. With others you can request your account currency to be in Euro and then any trades you make would go through in Euros whichever market you are trading on. This means that you have no exposure to currency risk whether you're trading UK stocks or US stocks. On the other hand with a company like IG Index you can still have your account in Euros and trade stocks in countries which have the Euro (Ireland, Germany...etc) in Euros but you can't do that for others like UK and American stocks. What happens is they take the deposit you need for the trade and convert it into pounds or dollars and therefore this exposes you to currency fluctuations.

Among the most popular trades on the financial spread betting platform are spread bets on Irish banking stocks such as Bank of Ireland. Airline Ryanair is another hugely popular trading choice amongst the spread betting community proving that the financial spread bettors are still the wind beneath the wings of the Irish airline.

Thoughts: You will probably find that many spread betting companies are in fact very similar in terms of the user interface, software and features you get. In terms of spreads I guess the bigger companies in the UK usually have smaller spreads. These companies also carry way more contracts than the smaller (Irish) companies.