How to place a spread bet on the currencies market

Foreign currency trading is something that attracts a lot of attention especially when people read of stories in the media where somebody says they made their fortune trading on the dollar. Within the last couple of years there will have been many professional spread traders who made a fortune going short on the sterling.

When you look at the currencies market, currencies are always quoted in pairs together. The main pairs that most traders use are the GBP/USD (the Pound Sterling versus the US Dollar), the GBP/EUR (the Pound versus the Euro) or the USD/YEN (the US Dollar versus Yen).

There are of course plenty of other currency pairings to choose from but these are the main ones for spread traders from the UK.

You choose a pair of currencies and then place your trade.  If you place a BUY bet then you are betting that the first currency will grow in value, i.e. become stronger against the second currency. A sell bet indicates the opposite. So, if you placed a Buy bet on the GBP/USD, you are saying that you believe the Pound will strengthen against the US Dollar.

If you are at all unsure, then place your spread trade on the phone with your spread betting company and tell them which way you want to place your trade and they will read it back to ensure it’s correct.