Quick answers to the most common Pound/Yen Trading questions:
Q) Where can I Spread Bet on Pound/Yen?
Forex Spread Trading on Pound / Yen
Q) Where can I Trade for Free on Pound/Yen?
Q) How to Spread Bet on Pound/Yen?
Q) Where can I find Free Live Prices on Pound/Yen?
Q) Where can I find Free Pound/Yen Charts?
Q) Where can I find free Forex Trading News?
Q) Where can I find Narrow Forex Spreads?
The Yen has profited from the current state of the markets. Investors continue to reduce their risk and have been pulling out of the ‘Carry Trade’ market. T
Forex Carry Trade:
This is where investors borrow low-yield currencies and invests the funds in high-yield currencies. In the normal course of affairs investors sell the currency they have borrowed and change it into other currencies. That will of course weaken the target currency (the one being borrowed).
If the Carry Trade is reduced then investors could expect the target currency, in this case the Yen, to strengthen. And that has been seen in recent days.
Example: an investor borrows ¥5,000. They convert the Yen into Sterling and buy bonds with the funds. If the bonds pay 4.5% and the Japanese interest rate is 0.5% then the investor should profit at 4.0% (ie 4.5% - 0.5%).
That should work if the exchange rate does not alter. This sort of leverage can be very profitable and the margins have been large enough to cause a large Retail business on top of the expected Fund business. If the investor uses a leverage of 10:1 then they can stand to make a profit of 40% (4.0% x 10).
The problems start if Sterling falls against the Yen. If that happens there is a risk of losing. Again because of the leverage, the losses can multiply rapidly.
With the Carry Trade becoming more risky and the Yen strengthening against the Pound that makes the Carry Trade even more risky. That further reduces the Carry Trade and further strengthens the Yen. And so on.
So how can you profit from this? One option is to spread trade on the Forex Pound / Yen markets, ie selling the Pound against the Yen.
spread trading on the Sterling/Yen
(Sept) price going below 224.86 by 14 September.
For the £/¥ market, you trade in £X per point, where a point is 0.01 of Sterling/Yen movement. If your stake is £20 per point and the Sterling/Yen moves 0.04 then that would be an £80 difference to your profits.
Financial Spreads » "With FinancialSpreads.com you get all the advantages of
Spread Betting as well as commission free CFD Trading on 2,500+ markets, 24 hour trading, professional level charts and..." read
Financial Spreads review.
Forex example: Selling the Pound v the Yen
Let's say you see the live price on a spread betting website like FinancialSpreads.com and it displays a spread of 224.74 - 224.86 and you have done your research and think that the Sterling/Yen (Sept) price will should go down below the 224.74 mark.
Therefore you sell at 224.74 for a stake of £10 per point.
So if, let's say that by the market closing date of 14 September the £/¥ (Sept) market closes at 224.62.
Your profit and loss is calculated by taking the difference between the value you sold the market at, ie 224.74 and the settlement value of 224.62 and then multiplying that by the stake per point of movement.
Profit / Loss = ((224.74 - 224.62) / 0.01) x £10 per point stake.
= (0.12 / 0.01) x £10 per point stake.
= £120 profit.
But if the market didn't move as predicted and had the Sterling/Yen (Sept) price gone up and closed at 224.88, then you would have made a loss.
Profit / Loss = ((224.74 - 224.88) / 0.01) x £10 per point stake.
= (-0.14 / 0.01) x £10 per point stake.
= -£140 loss.
Forex Daily Rolling Market for Sterling / Yen
In the above you can see how the Forex Daily Rolling Market for Sterling / Yen has climbed since the Near Year and seen a large drop since 17 July.
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.
'Forex Spread Trading on Pound / Yen' by DB, updated 11-Dec-08
For related pages also see:
CMC Spread Betting Markets, updated 02-Sep-08
CMC is one of the leading financial spread betting companies, they offer a wide range of markets and an award winning service. You can spread bet on shares, indices, sectors, commodities, treasuries and...read article: CMC Spread Betting Markets.
History of Financial Spread Betting, updated 28-Jan-09
The rise of spread betting in the UK can be dated back to the '70s when in '74 IG Index was founded. At the time IG Index was the only spread betting company in the UK. This initial growth was helped partly by the liberal UK Government tax policies...read article: History of Financial Spread Betting.
Forex Spread Trading on Pound / Yen, updated 11-Dec-08
Financial spread trading Sterling / Yen. Forex news, narrow spreads and where to find live prices....read article: Forex Spread Trading on Pound / Yen.
Understanding Financial Spreads - Financial Spread Betting, updated 05-Dec-08
As a trader you can speculate that the market value of a particular product will increase, in which case you would "buy" that product. eg if you thought that the price of Brent Crude Oil would rise you would "buy" Brent Crude Oil with a spread...read article: Understanding Financial Spreads - Financial Spread Betting.
UK Spread Betting Markets, updated 05-Dec-08
Financial spread betting in the UK became increasingly popular in the late 1990's due to some of the online features and information that became available. Technological advances and the increasing usage of the internet...read article: UK Spread Betting Markets.
Online Financial Spread Betting Companies, updated 05-Dec-08
Online financial spread betting companies have been growing in numbers of late, but a few seem to offer more such as...read article: Online Financial Spread Betting Companies.
Financial Spread Betting vs Share Dealing, updated 01-Dec-08
Many users use spread betting to complement their long term share dealing. For traditional share dealing in the UK, you need to pay a brokers fee...read article: Financial Spread Betting vs Share Dealing.
Predicting the Futures Markets with Technology, updated 01-Dec-08
The right spread trading strategies could help you successfully spread bet on different financial products, maximise profits and limit your losses. You should invest time in...read article: Predicting the Futures Markets with Technology.
Types of Spread Betting, updated 19-Jan-09
Spread betting is term used to describe a variation of betting gambling where an investor bets on the direction of a market. They either make a profit or loss depending on the deviation from the spread or...read article: Types of Spread Betting.
Financial Spread Trading Opportunity and Risk, updated 15-Jan-09
The risks involved in financial spread betting can be high. You can lose more money than you initially invest. People who spread bet on shares need to understand the market. You can usually minimize risks by limiting losses using various tools and...read article: Financial Spread Trading Opportunity and Risk.
Financial Spread Betting in the UK, updated 15-Jan-10
When you spread bet on stock market indices, the stock market indices, eg FTSE 100 or NASDAQ 100, act as the financial instrument. The investor speculates on the price movement of the whole stock market index. Unlike share dealing, you do not actually...read article: Financial Spread Betting in the UK.
Spread Trading Tips - A Technical and Analytical Game, updated 28-Jan-09
Most experienced spread traders would probably cite one of their top financial spread betting tips is to understand the importance of placing stop losses and limit orders. You can use a stop loss or limit order feature at most levels. This feature limits your...read article: Spread Trading Tips - A Technical and Analytical Game.
Easter Trading Hours, updated 13-Apr-09
Easter Financial Spread Betting Hours. Ensure you are not get caught out. The Financial Spreads opening hours provide an example of what you can expect. However please...read article: Easter Trading Hours.
Trading Hours Presidents Day, updated 18-Feb-08
A quick look at the President's Day trading hours. FinancialSpreads.com's opening hours provide an example of when you can expect the markets to be open. Please check directly with other spread betting brokers...read article: Trading Hours Presidents Day.
Holiday Trading Hours, updated 31-Dec-09
A quick look at the seasonal trading hours. FinancialSpreads.com's festive opening hours provide an example of when you can expect the markets to be open. Please check directly with other spread betting providers...read article: Holiday Trading Hours.
May Bank Holiday Spread Betting Hours, updated 04-May-09
With the European May Bank Holiday and UK Bank Holiday make sure you do not get caught out. The Financial Spreads opening hours provide an example of what you can expect...read article: May Bank Holiday Spread Betting Hours.
Q) Average Trading Results?
A) Get free spread betting tips, offers, price updates, important news and more!