Sterling/Dollar Spread Betting Guide
Where to Spread Bet on Sterling/Dollar
You can trade FX spread betting markets such as Sterling/Dollar with spread betting companies like:
How to Spread Bet on Sterling/Dollar
Should you decide to spread trade on a foreign exchange pair such as the Sterling/Dollar then, looking at a site like FinancialSpreads.com, at the time of writing you would find a spread of $1.5590 – $1.5592.
Therefore, you can bet on the Sterling/Dollar to increase higher than $1.5592 or decrease lower than $1.5590.
When spread trading, you bet on every unit the market moves up or down; with the Sterling/Dollar market a unit is $0.0001 of the forex pair’s price movement.
For this instance, you might choose to bet £3 for every $0.0001 the Sterling/Dollar rises or falls.
Buying – Spread Betting on Sterling/Dollar to Increase
If you were to go long of the Sterling/Dollar at $1.5592 and the forex pair increased then the spread could change to $1.5639 – $1.5641. Assuming this was the case, you could close your spread bet at $1.5639.
P&L = (settlement value of the market – opening value of the market) x stake per $0.0001
P&L = ($1.5639 – $1.5592) x £3 per $0.0001 stake
P&L = $0.0047 x £3 per $0.0001
P&L = £141 profit
Markets can also fall, if the market had decreased to, for example, $1.5553 – $1.5555, you may decide to close your trade to limit your losses. Therefore, you would sell the market at $1.5553.
With the same £3 per $0.0001 stake:
P&L = (settlement value of the market – opening value of the market) x stake per $0.0001
P&L = ($1.5553 – $1.5592) x £3 per $0.0001 stake
P&L = -$0.0039 x £3 per $0.0001
P&L = -£117 loss
Selling – Spread Betting on Sterling/Dollar to Decrease
One of the advantages of placing a spread trade is that investors can go short of the markets.
Initially, the spread betting price was $1.5590 – $1.5592.
If you were to sell the Sterling/Dollar at $1.5590 and the forex pair decreased then the spread could become $1.5544 – $1.5546. If this were the case, you might decide to close your spread bet for a profit at $1.5546.
P&L = (opening value of the market – settlement value of the market) x stake per $0.0001
P&L = ($1.5590 – $1.5546) x £3 per $0.0001 stake
P&L = $0.0044 x £3 per $0.0001
P&L = £132 profit
Financial markets also move up, if the market increased to, for example, $1.5625 – $1.5627, you may want to close your bet to limit your losses. If that happened, you would buy back at $1.5627.
You would close your bet with the same £3 per $0.0001 stake:
P&L = (opening value of the market – settlement value of the market) x stake per $0.0001
P&L = ($1.5590 – $1.5627) x £3 per $0.0001 stake
P&L = -$0.0037 x £3 per $0.0001
P&L = -£111 loss
Sterling/Dollar Rolling Daily market correct as of 13-Aug-10.
FX Spread Betting Guide
- Where can I Spread Bet on FX Markets?
- Where can I find Real-time Spread Betting Prices for FX Markets?
- Where can I find Live Charts / Candlestick Charts for FX Markets?
- How do you Spread Bet on FX Markets to Go Up?
- How do you Spread Bet on FX Markets to Go Down?
Spread Betting carries a high level of risk to your capital and you can lose more than your initial investment, it may not be suitable for all investors. Ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved and seek independent financial advice where necessary.