FX Spread Betting
The CleanFinancial guide to FX spread betting.
FX Spread Betting Comparison |
Each of the following companies offers a wide range of FX markets. Here we have listed an FX spread betting comparison table for some of the most popular markets.
| EUR / USD Daily - Spread Size |
1 |
1 |
1 |
2 |
0.8 |
1 |
1 |
1 |
| EUR / USD Daily - Min Stake |
£1 |
£0.50 |
£0.50 |
£0.5 |
£1 |
£1 |
£1 |
£1 |
| GBP / USD Daily - Spread Size |
2 |
2 |
2 |
3 |
0.8 |
2 |
2 |
2 |
| GBP / USD Daily - Min Stake |
£1 |
£0.50 |
£0.50 |
£0.5 |
£1 |
£1 |
£1 |
£1 |
| EUR / GBP Daily - Spread Size |
1 |
2 |
2 |
1 |
1 |
1 |
1 |
2 |
| EUR / GBP Daily - Min Stake |
£1 |
£0.50 |
£0.50 |
£0.5 |
£1 |
£1 |
£1 |
£1 |
| USD / JPY Daily - Spread Size |
0.8 |
2 |
1 |
2 |
0.8 |
0.8 |
0.8 |
2 |
| USD / JPY Daily - Min Stake |
£1 |
£0.50 |
£0.50 |
£0.5 |
£1 |
£1 |
£1 |
£1 |
Comparison Notes.
FX Spread Betting Account |
The above companies tend to offer a wide range of FX, indices, shares and commodities markets.
Importantly, each of the above companies is authorised and regulated by the Financial Services Authority.
If you are looking to open a spread betting account then you can read a review of each company by clicking on the relevant company logo.
Please note that spread betting accounts are subject to status, terms and conditions.
Please find below a list of articles that are updated daily and specifically cover the FX markets or often cover the FX markets as part of a wider market review.
Spread Betting Guides to Individual FX Pairs |
On CleanFinancial we offer more than 50 reviews covering individual FX markets from the ‘majors’ to the ‘minors’ to the ‘exotics’.
For a more in-depth look at the most popular markets see:
Also see our guide to spread betting on the Chinese renminbi / trading the yuan.
FX Spread Betting - FX Charts |
This CFD trading chart offers a useful overview of the EUR/USD rate. You can also use the search option to access charts for more than 40 other FX markets.
The Plus 500 chart that we use above is typically based on the futures market.
If you'd like to look at live spread betting prices/charts, you may need a spread betting account.
A spreads account would also give you access to shorter term daily markets. Please note that all such accounts are normally dependent on suitability and status checks.
Of course, if you want to trade then, before starting, be aware that CFDs and financial spread betting carry a significant level of risk to your funds and can result in losses that exceed your initial deposit.
Below we have listed the companies that offer charts (these days most of the larger companies will offer these as a matter of course).
Comparison Notes.
Most companies offer clients free charts and, like the Financial Spreads example below, you can often view candlestick charts.
In the majority of cases you can alter the charts so that you can see market movements in 1, 2, 5, 10 and 30 minute intervals. If you’re interested in a longer-term view then you can also set the charts to hourly, daily and weekly intervals.
Charts with FinancialSpreads also offer other benefits such as:
- BackTesting and Custom Indicators
- Numerous chart overlays e.g. Parabolic SAR, Ichimoku Cloud, Chande Kroll Stop etc.
- A choice of indicators e.g. Williams %R, Relative Volatility Index, Accumulation Distribution etc.
- Custom alerts that trigger when your chosen market hits a given level
Sample FX Chart
FX Trading Platforms, Software and Live FX Prices |
Indicative FX prices:
Click on the tabs for key stock market indices, FX and equities markets.
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Above, indicative prices from Financial Spreads: 2,500+ live prices available to Spread Betting and CFD clients.
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Some spread betting companies offer users software / trading platforms that you need to download. However most companies, including the ones listed below, offer web based platforms.
A web based FX platform means that you don’t have to worry about installing new trading software. It also means that you can probably access your spread betting account from the office, from home and from most other places where you can access the internet.
Each of the following companies also offers account holders live prices.
| Spread Betting Firm |
Live Prices? |
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FX Spread Betting - Free Demo Accounts |
If you are looking to test out some new trading theories and ideas then it’s often wise to test them on a Demo Account / Test Account. These are free practice accounts where you can trial spread betting numerous spread betting markets, including FX rates like Sterling/Dollar, Euro/Dollar, Dollar/Yen etc, without risking any capital.
Comparison Notes.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
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As with a range of financial markets, an investor can place a spread bet on forex pairs, such as euro-sterling, to rise or fall.
Looking at a platform like Financial Spreads, you can see that they have put the euro-sterling Rolling Daily market at £0.80463 - £0.80473. This means you could spread bet on the euro-sterling pair:
 Rising above £0.80473, or
 Falling below £0.80463
Whilst financial spread trading on euro-sterling you trade in £x per point where a point is £0.00010 of the pairs movement. As a result, if you decided to have a stake of £5 per point and euro-sterling moves 22.0 points then that would be a difference to your bottom line of £110. £5 per point x £0.00220 = £5 per point x 22.0 points = £110.
Rolling Daily FX Markets
One thing to note is that this is a Rolling Daily Market which means that it does not have a set closing date. You do not have to close your trade, should it still be open at the end of the trading day, it will simply roll over to the next session.
If you allow your FX bet to roll over then you are normally charged a small financing fee. If you would like a fully worked example then see Rolling Daily Spread Betting.
FX Spread Betting Example |
If you think about the spread of £0.80463 - £0.80473 and assume:
- You've completed your forex market research, and
- You think the euro-sterling rate will rise higher than £0.80473
Then you might choose to go long of the market at £0.80473 and invest, for the sake of argument, £4 per point.
With such a spread bet you win £4 for every point (£0.00010) that the euro-sterling rate increases above £0.80473. Nevertheless, it also means that you will lose £4 for every point that the euro-sterling market falls below £0.80473.
Looked at another way, if you buy a spread bet then your P&L is found by taking the difference between the settlement price of the market and the price you bought the spread at. You then multiply that difference in price by your stake.
If after a few days the FX rate started to increase then you might want to close your trade in order to guarantee your profit.
Taking this a step further, if the market did go up then the spread, determined by the spread betting company, could be adjusted to £0.80791 - £0.80801. You would close your trade by selling at £0.80791. Therefore, with the same £4 stake your profit would be:
Profit / loss = (Final Price - Initial Price) x stake
Profit / loss = (£0.80791 - £0.80473) x £4 per point stake
Profit / loss = £0.00318 x £4 per point stake
Profit / loss = 31.8 points x £4 per point stake
Profit / loss = £127.20 profit
Speculating on FX, whether by spread betting or otherwise, can go against you. In this example, you wanted the forex rate to rise. Nevertheless, the FX rate might fall.
If the euro-sterling market weakened, against your expectations, then you might decide to settle/close your spread bet to stop any further losses.
Should the spread pull back to £0.80199 - £0.80209 you would close your position by selling at £0.80199. That would mean you would lose:
Profit / loss = (Final Price - Initial Price) x stake
Profit / loss = (£0.80199 - £0.80473) x £4 per point stake
Profit / loss = -£0.00274 x £4 per point stake
Profit / loss = -27.4 points x £4 per point stake
Profit / loss = -£109.60 loss
Note - euro-sterling Rolling Daily currency market accurate as of 25-Oct-12.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
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FX Spread Betting - Fundamental Analysis and Technical Analysis |
Fundamental analysis is employed by numerous FX traders. It boils down to determining a security’s price by considering all the relevant economic and financial data as well as other qualitative factors.
For example, if you were trying to determine a share’s fair value then you would concentrate on fundamental factors that alter an organisation's actual performance and its future prospects. As you would expect, a lot of this is predicated on the firm's annual reports, however, it is also dependent on a range of external factors. Once a fair value is established a trader can work out whether they should buy or sell the shares.
To help you with your fundamental analysis of the FX markets we have a series of daily articles looking at the FX markets eg please see the articles listed in the FX Trading News section above.
Given that the FX markets are so vast and have so many influencing factors many traders prefer to use a mixture of fundamental analysis and technical analysis when they are evaluating markets.
Technical analysis is based on spotting price movements in historical trends. It’s purely numbers based and so FX charts are crucial.
With technical analysis, the rationale is that all of the critical information is actually built into the price of the market.
Therefore, an investor does not have to go through the financial reports, market information, economic news etc simply because such aspects are, in theory, reflected in the current level of the market.
Nevertheless, while this analysis can be relatively quick and useful, there is a major drawback. This type of analysis is predicated on historical data. Just because the particular forex rate has been falling, that doesn't necessarily mean that the rate will continue to fall.
Please note that Clean Financial offers daily FX technical analysis.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
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Factors that Influence the FX Markets |
Some of the variables that have the most significant impact on the FX markets include interest rate changes, rising/falling inflation and, by extension, any central bank decisions or announcements.
FX markets are traded in pairs so, for example, you could buy/sell the Dollar against the Euro as the values of the currencies diverge.
It is worth noting that the demand for a currency is often based upon interest rates. Higher rates often, although not always, will make a certain currency more attractive.
The central banks, such as the ECB, Bank of England and US Federal Reserve, normally set interest rate levels. For that reason they have a major influence on the FX markets.
A central bank could also flood the FX markets with its country's domestic currency in an attempt to reduce the value of it. Quantitative easing is a common example of this. The opposite would be large scale purchasing of its domestic currency in order to try to raise its value.
Note also that if a country becomes politically unstable, its domestic currency can drop in value as traders lose faith in the national government’s ability to successfully support a healthy economy.
Conversely, a nation recovering from a phase of instability can certainly become more appealing to traders. This can increase the value of their domestic currency. Increasing or falling jobs figures can also influence the foreign exchange market.
You should also note that the forex spread betting markets are also influenced by investor sentiment. This essentially means that investors trading the FX spread betting markets can become either more or less positive, with sentiment spreading to such a degree that it will start to impact on buying and selling actions.
Spread Betting, Margined FX and CFDs are leveraged trading products that carry high levels of risk to your capital. Before trading, ensure that you fully recognise the risk involved.
Spread Betting, Margined FX and CFDs are not suited to all investors. Losing trades can exceed your original stake or investment. When trading via these products ensure you always invest using capital you can afford to lose. Seek independent financial guidance where you feel it is necessary.
Financial Spreads » "With FinancialSpreads.com you get all the normal
advantages of Spread Betting plus..." » read Financial Spreads review.
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Risk Warning: Spread betting and CFD trading carry a high level of risk to your capital and you may lose more than your initial investment. Spread betting and CFD trading may not be suitable for all investors. Only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved and seek independent financial advice where necessary.
'FX Spread Betting' by DB, updated 15-May-13
For related pages also see:
Forex Trading Guide, updated 15-May-13
Forex Trading Guide: the complete guide to trading the forex markets including live forex charts, live prices, where to trade, daily forex analysis, forex technical analysis, how to trade, the global forex markets and...read article: Forex Trading Guide.
FX Spread Betting, updated 15-May-13
FX Spread Betting: the complete FX spread betting guide with an FX price comparison, live FX spread betting prices & live charts. Plus analysis and factors that influence the foreign exchange markets as well as...read article: FX Spread Betting.
FX Trading Guides, updated 23-May-13
40+ individual FX trading and spread betting guides for Euro-Dollar, Sterling-Dollar, Dollar-Yen etc. Every guide covers live prices and charts, where to spread bet on the FX market, a worked trading example and...read article: FX Trading Guides.
Euro-Dollar Spread Betting, updated 07-May-13
The Euro/Dollar spread betting review: live Euro/Dollar charts and prices, where to spread bet tax-free* and with 0% commission, Euro/Dollar spreads comparison, a look at...read article: Euro-Dollar Spread Betting.
Dollar-Yen Spread Betting, updated 07-May-13
The Dollar/Yen spread betting review: live Dollar/Yen charts and prices, where to spread bet tax-free* and with 0% commission, Dollar/Yen spreads comparison, a look at...read article: Dollar-Yen Spread Betting.
Sterling-Dollar Spread Betting, updated 07-May-13
The Sterling/Dollar spread betting review: live Sterling/Dollar charts and prices, where to spread bet tax-free* and with 0% commission, Sterling/Dollar spreads comparison, a look at...read article: Sterling-Dollar Spread Betting.
Euro-Sterling Spread Betting, updated 07-May-13
The Euro/Sterling spread betting review: live Euro/Sterling charts and prices, where to spread bet tax-free* and with 0% commission, Euro/Sterling spreads comparison, a look at...read article: Euro-Sterling Spread Betting.
Dollar - Swiss Franc Spread Betting, updated 07-May-13
The complete Dollar/Swiss Franc spread betting review: live charts and prices for the Dollar/Swiss Franc market, which FX brokers offer commission-free spread betting, how to spread bet on the Dollar/Swiss Franc market and...read article: Dollar - Swiss Franc Spread Betting.
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