1. About Forex Spread Betting
Some of the most popular markets in spread betting are the forex markets, perhaps not surprisingly the most frequently traded are Sterling / Dollar, Euro / Sterling, Euro / Dollar and Dollar / Yen.
There are many reasons why you might want to trade the foreign exchange markets:
- The wide range of forex pairs on offer. This can be a major lure to investors owing to the many different ways in which these pairs can move depending on market conditions.
- Forex markets can be exciting to trade because of the typically higher volatility associated with currency pairs when compared with ordinary shares or indices. Nevertheless, this same volatility can also work against even the most experienced traders and can lead to quick losses should the market work against you.
- Forex spread betting is Tax Free*
- Both buying and selling – you can bet on a currency pair going up or down
- Spread bets are leveraged. You can win more than your initial stake. Remember though that you can also lose more than your initial investment.
Note that if you are spread trading the Forex markets then using Stop Losses can help restrict your downside.
Forex markets are split into 3 groups:
- Majors – the most active and widely traded currency pairs eg Euro / Dollar, Dollar / Yen and Euro / Sterling
- Minors – the less active and less liquid currency pairs which are less popular than the Majors but more popular than Exotics eg Sterling / Canadian Dollar, Australian Dollar / Yen and Dollar / Danish Krone.
- Exotics – forex pairs that are less broadly traded than any of the Major and Minor currencies eg Dollar / Czech Koruna, Sterling / Hungarian Forint, Dollar / Mexican Peso, Euro / Polish Zloty.
For more information and trading examples on specific currency pairs see:
2. Where can I Financial Spread Bet on Forex?
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| Dollar/Yen Daily |
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| Dollar/Yen Future |
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| Euro/Dollar Daily |
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| Euro/Dollar Future |
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| Euro/Sterling Daily |
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| Euro/Sterling Future |
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| Sterling/Dollar Daily |
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| Sterling/Dollar Future |
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| Sterling/Euro Daily |
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| Sterling/Euro Future |
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| Other Forex |
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The above spread betting markets may also be available with other companies. Also see Comparison Table Notes.
3. How to Spread Bet on Forex
As with many markets, you can bet on the Foreign Exchange markets, ie you can financial spread bet on Forex prices rising or falling.
At the time of writing, with FinancialSpreads.com, you can bet on the GBP/USD rate being below $2.0221 or closing above $2.0229 on 14-Dec-07.
Note that for the Sterling / US Dollar market, you trade in £X per point, where a point is $0.0001 of GBP/USD movement. For example if your stake was £5 per point and the GBP/USD moves $0.0009 then that would be a £45 difference to your bottom line.
GBP / USD Example
Let's say you check the price and it shows the above spread of $2.0221 - $2.0229.
1) You feel that the GBP / USD (December) should rise above $2.0229
2) So you go long (buy). You invest £5 per point
3) The value increases. You run the spread bet until the settlement day of 14-Dec-07
4) It settles at $2.0245
5) Opening value = $2.0229
6) Profit/loss = ((closing price - opening level) / per point) x stake
7) Profit/loss = (($2.0245 - $2.0229) / $0.0001) x £5 per point stake
8) Profit/loss = ($0.0016 / $0.0001) x £5 per point stake
9) Profit/loss = 16 points x £5 per point
10) Profit/losss = £80
But if the market didn't move as expected and had the GBP / USD rate gone against you and closed lower at 2.0215, then you would have made a loss.
5) Opening price = 2.0229
6) Profit/loss = ((closing level - opening price) / per point) x stake
7) Profit/loss = (($2.0215 - $2.0229) / $0.0001) x £5 per point stake
8) Profit/loss = (-$0.0014 / $0.0001) x £5 per point stake
8) Profit/loss = -14 points x £5 per point
9) Profit/loss = -£70
(Forex prices quoted as of 12-Sep-2007).
4. Where can I find Real-Time Forex Spread Betting Prices?
All of the above companies provide access to real-time indices prices to their account holders.
Note that you may need to log into your account in order to see the live Forex prices.
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www.FinancialSpreads.com Narrow Spreads, Free Charts and Live Prices.
No Fees, No Commissions, Spread Bet on Shares, Indices, Forex, Commodities Apply Now.
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5. Where can I find Forex Candlestick Charts?
A number of the spread betting companies offer a variety of charts, including candlestick charts. Note that you may need to open an account with the respective company in order to see the charts and/or have full access to real-time charts that you can manipulate. Spread betting accounts are subject to status, terms and conditions.
Candlestick charts are currently available with:
Charts may also be available from other spread betting companies.
Example forex charts from Financial Spreads:
Example Euro Dollar Candlestick Chart:
Advert
www.FinancialSpreads.com Narrow Spreads, Free Charts and Live Prices.
No Fees, No Commissions, Spread Bet on Shares, Indices, Forex, Commodities Apply Now.
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"Forex Spread Bet" last update by RThomas, 03-Sep-2010
Warning: Financial spread betting carries a high level of risk. You can lose more than your initial investment or stake. Financial spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.
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