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Why the Spread Bet price differs

from the underlying cash price

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The price differential refers to what's called the cost of carry.

If you buy £10,000 of Barclays using a traditional stockbroker you would have to pay the full amount in cash. But if you bought the equivalent sized position using a spread bet you would be required to only pay a deposit of say 10% or £1,000, see - How 'Margin' works

Assume you had £10,000 and bought the position using spread bets putting up a deposit of just £1,000. The balance of £9,000 would be left in your deposit account earning interest. And it is this interest payment that is the cost of carry.

So the price differential of the spread bet market versus the cash market takes the cost of carry into account so in effect there's neither an advantage nor disadvantage to buying a security either way.
WARNING! - Spread Bet Broker Advice

There are good spread bet brokers and there are bad ones.

Having a good broker won't guarantee you profits but a bad broker will probably lead to losses as a combination of their gamesmanship and suspect software takes its financial toll.

So who do I recommend?

Simple, the 2 brokers I personally use for my own spread betting (and I've used them for years) -

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