Forex Spread Betting - Spread Bet on Foreign Exchange Markets
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How to Spread Bet on Forex - an introduction to foreign exchange betting. Currencies fluctuate for a number of reasons eg changes interest rates, speculative trading and central bank intervention. If you are looking for FX trading information, you're on the right website.
Popular FX questions:
Q) Where can I Spread Bet on FX?
Q) Where can I Trade for Free on FX?
Q) How to Spread Bet on FX?
Q) Where can I find Free Live Prices on FX?
Q) Where can I find Free FX Charts?
Q) Where can I find free FX Trading News?
Q) Where can I find Narrow FX Spreads?
Forex Narrow Spreads Comparison
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| GBP / USD Daily - Spread Size |
3 |
5 |
3 |
3 |
2 |
3 |
2-4 |
| GBP / USD Daily - Min Stake |
£1 |
£5 |
£1 |
£0.50 |
£1 |
£1 |
£1 |
| GBP / USD Future - Spread Size |
8 |
8 |
8 |
12 |
6 |
8 |
- |
| GBP / USD Future - Min Stake |
£1 |
£2 |
£1 |
£1 |
£1 |
£1 |
- |
| GBP / EUR Daily - Spread Size |
4 |
5 |
4 |
2 |
5 |
4 |
1-3‡ |
| GBP / EUR Daily - Min Stake |
£1 |
£5 |
£1 |
£0.50 |
£1 |
£1 |
£1 |
| GBP / EUR Future - Spread Size |
10 |
- |
10 |
10 |
15 |
10 |
- |
| GBP / EUR Future - Min Stake |
£1 |
- |
£1 |
£1 |
£1 |
£1 |
- |
| EUR / USD Daily - Spread Size |
2 |
5 |
2 |
2 |
1 |
2 |
1-3 |
| EUR / USD Daily - Min Stake |
£1 |
£5 |
£1 |
£0.50 |
£1 |
£1 |
£1 |
| EUR / USD Future - Spread Size |
6 |
- |
6 |
12 |
6 |
6 |
- |
| EUR / USD Future - Min Stake |
£1 |
- |
£1 |
£1 |
£1 |
£1 |
- |
Comparison Notes
How to Spread Bet on Forex / Foreign Exchange: Selling FX GBP / US$
You think Sterling could weaken against the Dollar over the next few months. You want to take advantage and sell.
You check a spread betting website and see the GBP / US$ foreign exchange rate is quoted as 1.8846 - 1.8856. Because you think the dollar will strengthen you sell at 1.8846 for say a stake of £2 per point movement (0.0001). ie £2 per tick.
On the back of strong figures from the US, the price of Sterling (£) falls against the US Dollar ($) to 1.8452.
Your profit is calculated by calculating the difference between the closing level (1.8452) and the opening price (1.8846) and multiplying by the stake.
Profit = (1.8846 - 1.8452) / 0.0001 x £2 per point stake
= 394 points x £2 per point = £788 profit
However had Sterling held its value better the price could have closed at 1.8942 and you would have lost.
Loss = (1.8846 - 1.8942) / 0.0001 x £2 per point stake
= -96 points x £2 per point = £192 loss
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How to Spread Bet on Forex / Foreign Exchange: Buying FX Sterling/US Dollar Example 2
You think Sterling will strengthen against the Dollar over the next few months. You call check the quote online of 'GBP / US$ June'. The expiry date being the second Wednesday in June. You see a spread of 1.8440 - 1.8450 US$ to £1.
ie £1 is worth US$1.8440 to US$1.8450.
Because you think the GBP will strengthen you Buy at 1.8450 for say a stake of £5 per point movement (0.0001). ie £5 per tick.
On the back of weak figures from the US, the price of Sterling (£) rises against the US Dollar ($) to 1.8522.
Your profit is calculated by calculating the difference between the closing level (1.8522) and the opening price (1.8450) and multiplying by the stake.
Profit = (1.8522 - 1.8450) / 0.0001 x £5 per point stake
= (0.0072 / 0.0001) x £5 per point = £360 profit
However had the Dollar held its value and there was no change the markets price could have settled at 1.8442 and you would have lost.
Loss = (1.8442 - 1.8450) x £5 per point stake
Loss = (-0.0008 / 0.0001) x £5 per point stake
= -8 points x £5 per point = £40 loss
ie in this case although the price didn't drop, there was little movement in the market and it settled 'within the spread'. Therefore you would have lost money.
Forex Spread Betting Markets
Each company will have their own specific online markets however a number of the companies will offer most, if not all, of the following:
- AUD / JPY
- AUD / NZD
- AUD / USD (Aus Dollar / US Dollar)
- CHF / JPY (Swiss Franc / Japanese Yen)
- EUR / AUD
- EUR / CHF
- EUR / GBP (Euro / Pound), (Euro / £)
- EUR / JPY
- EUR / USD (Euro / Dollar), (Euro / $)
- GBP / AUD
- GBP / CHF
- GBP / JPY (£ / ¥)
- GBP / NZD
- GBP / USD (Sterling / Dollar), (£/$)
- NZD / USD (New Zealand / Dollar)
- USD / CAD (Dollar / Canadian Dollar)
- USD / CHF (Dollar / Swiss Franc)
- USD / JPY (Dollar / Yen)
The Best Spread Betting Companies?
If you're looking for places to spread bet - have a look at the following comparison click here
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1000s of Equities, Indices, Forex and Commodities markets.
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How to Spread Bet
How to spread bet on Bonds and Interest Rates
How to spread bet on Commodities
How to spread bet on Forex
How to spread bet on Shares
How to spread bet on Stock Market Indices
How to spread bet on Sports
'Forex Spread Betting' by JW, updated 26-Nov-07
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