GBP/USD Spread Betting

GBP/USD Spread Betting

GBP/USD Spread Betting Guide

arrow_forwardLive GBP/USD Chart
arrow_forwardLive GBP/USD Prices
arrow_forwardWhere to Spread Bet on GBP/USD
arrow_forwardHow to Spread Bet on GBP/USD


Live GBP/USD Chart and Prices



15 September 2017: GBP/USD is Aiming for $1.35 and a Tempting Buy

As discussed, GBP/USD is tempting when it breaks $1.35.

However, I bought EUR/USD yesterday and so if I buy GBP/USD then I’m doubling up on shorting the dollar and that’s not something I want to do.

Doing this would be a common error with financial spread betting, i.e. trading a number of similar markets in the same direction and then getting caught out on multiple trades when one key component changes.

Having said that, when I get out of my EUR/USD spread bet then I’ll take another look at sterling.

Likewise, if the EUR/USD market isn’t behaving as expected then I’d probably close that trade and take another look at sterling.


13 September 2017: GBP/USD Takes a Lethargic Climb to 1 Year High

GBP/USD has hit $1.332, a one year high but it’s a long way off the pre-UK referendum level of $1.50.

This is an extreme example of how markets rise slowly and fall quickly…

If / when $1.35 is cleared then there could be some interesting price moves. It’s worth keeping an eye on this market.

I’d better have a rest after that climb…


19 July 2017: GBP/USD Consolidates Above $1.30

According to Ipek Ozkardeskaya, Senior Analyst, LCG Review, “GBP/USD is consolidating above $1.30 despite yesterday’s low UK inflation data.

“The failure to stay below the $1.30 support level has prevented yesterday’s quick downside move from gaining traction. The pattern hasn’t been established yet but this could be an early indication that a bullish trend could develop.

“The weekly positive momentum is the strongest it’s been since the EU referendum.

“The next key mid-term resistance is at $1.3420, i.e. a 50% retracement of the post-Brexit fall.

warning “A warning, there are large $1.30/$1.31 call options are waiting to be exercised on Thursday.”


Where Can I Spread Bet on GBP/USD?

Most FCA regulated spread betting firms offer live prices and charts on forex markets like GBP/USD.

See the FX comparison table below.


GBP/USD Spread Betting Comparison

Company Forex Min
Stake
EUR/USD
Spread
GBP/USD
Spread
EUR/GBP
Spread
USD/JPY
Spread
AUD/USD
Spread
Apply
Financial Spreads Review £0.50 0.7 0.9 0.8 0.8 0.8 Apply
City Index Review £0 Variable Variable Variable Variable Variable Apply
ETX Capital Review £0.50 0.88†† 1.19†† 1.32†† 1.38†† 1.14†† Apply
IG Review £1-5 Variable Variable Variable Variable Variable Apply
InterTrader Review £1 Variable Variable Variable Variable Variable Apply


How to Spread Bet on GBP/USD

For example, let’s say that you want to speculate on the sterling / dollar rate, you look at a financial spread betting website, such as InterTrader, and see the live GBP / USD market which is priced at:

GBP / USD Rolling Daily: $1.59545 – $1.59565

Here is how the trade works.

The Market: GBP / USD Rolling Daily
The Quote: $1.59545 – $1.59565
This Means That: Now you can take a position on the GBP / USD Rolling Daily market to go:

  arrow_upward  Above $1.59565, or
  arrow_downward  Below $1.59545

This is a ‘Rolling Daily’ market which means that there is no closing date for this spread bet. If you don’t close your trade and the trading session ends then your position will automatically roll over to the next session.

Note: if a trade does roll over then you will normally either pay or receive a small fee for overnight financing based on the direction of your position.

For further information see our guide to ‘Rolling Spread Bets’.
Units Traded: Spread bets on the GBP / USD market are made in £x per point.

Where a point is $0.00010 of the FX market’s price movement.

E.g. if GBP / USD moves by $0.00550 then you would lose or gain 55 multiples of your stake.
Stake (Trade Size): You work out how much you are going to risk per point, e.g. £1 per point, £4 per point, £10 per point, £20 per point etc.
Quick Staking Exercise: With that in mind, if your stake was £3 per point and GBP / USD moves $0.00310 (31 points), you would lose or win £3 per point x 31 points = £93.


Fully Worked Example | Buying the Pound/Dollar

Spread betting on sterling to get stronger

You Choose Whether to Buy or Sell: GBP / USD to push:

  arrow_upward  Above $1.59565? or
  arrow_downward  Below $1.59545?

Let’s Assume You Want to Buy:   arrow_upward  Above $1.59565
You Choose How Much to Risk, Opting for: £4 per point
So Now What?
  • Your trade wins £4 for each point ($0.00010) the GBP / USD rate climbs above $1.59565
  • Your trade loses £4 for every point ($0.00010) the GBP / USD rate falls below $1.59565
If You Are Spread Betting on a Market to Go Up Your Trading Profits (or Losses) = (Closing Rate – Initial Rate) x stake per point
 
Scenario 1 The GBP / USD rate increases and the market is moved to $1.59884 – $1.59904.
Time to Lock in a Profit? At this point, you can opt to leave your FX spread bet open or close it to take your profit. In this case you opt to settle your position and sell the market at $1.59884.
Your Trading Profits (or Losses) = (Closing Rate – Initial Rate) x stake per point
($1.59884 – $1.59565) x £4 per point (£4 per $0.00010)
$0.00319 x £4 per point
31.9 points x £4 per point
Your Trading Profits (or Losses) = £127.60 profit
 
Scenario 2 The GBP / USD pair decreases and the financial spread betting market becomes $1.59286 – $1.59306.
Limit Your Loss? At this point, you could choose to let your spread bet run or close it, i.e. close your trade to limit your losses. In this case you opt to close your bet and sell at $1.59286.
Your Trading Profits (or Losses) = (Closing Rate – Initial Rate) x stake per point
($1.59286 – $1.59565) x £4 per point (£4 per $0.00010)
-$0.00279 x £4 per point
-27.9 points x £4 per point
Your Trading Profits (or Losses) = -£111.60 loss


Worked FX Spread Betting Example | Taking a Short Position on GBP / USD

Financial spread betting on the dollar to get stronger

You Decide to Buy or Sell: GBP / USD going:

  arrow_upward  Above $1.59565? or
  arrow_downward  Below $1.59545?

Let’s Say You Go Short:   arrow_downward  Below $1.59545
You Decide How Much to Risk, Let’s Assume You Select: £2 per point
What Now?
  • Your trade loses £2 for every point ($0.00010) the GBP / USD rate goes higher than $1.59545
  • Your trade wins £2 for every point ($0.00010) the GBP / USD rate goes lower than $1.59545
When Going Short of a Market Your Trading Profits (or Losses) = (Initial Rate – Closing Rate) x stake per point
 
Scenario 3 The GBP / USD rate pushes lower and the forex spread betting market is revised to $1.59046 – $1.59066.
Close and Take a Profit? You can decide to leave your spread bet open or close it in order to take your profit. In this example you decide to settle your position by buying the market at $1.59066.
Your Trading Profits (or Losses) = (Initial Rate – Closing Rate) x stake per point
($1.59545 – $1.59066) x £2 per point (£2 per $0.00010)
$0.00479 x £2 per point
47.9 points x £2 per point
Your Trading Profits (or Losses) = £95.80 profit
 
Scenario 4 GBP / USD pushes higher and the FX spread betting market adjusts and moves to $1.59944 – $1.59964.
Close and Limit the Loss?At this point, you can choose to let your spread bet run or close it, i.e. close your spread bet to restrict your loss. In this case you decide to close your trade and buy the market at $1.59964.
Your Trading Profits (or Losses) = (Initial Rate – Closing Rate) x stake per point
($1.59545 – $1.59964) x £2 per point (£2 per $0.00010)
-$0.00419 x £2 per point
-41.9 points x £2 per point
Your Trading Profits (or Losses) = -£83.80 loss


GBP / USD Notes:


Video: How to Think About Forex Technical Analysis

Below a useful 5 minute video covering GBP/USD, EUR/USD and USD/JPY.

IG analyst, Chris Beauchamp, looks at the state of play of these popular FX markets as of 28 March 2017.

Having said that, don’t worry if the video is seemingly out-of-date. It also serves as a useful guide for how to think about the forex markets from a technical analysis standpoint.



AuthorAlex Turner

Senior Editor, SpreadBetMagazine

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