Four Things to Know About Currencies Spread Betting

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Feb 14, 2011, 03:59 ET

LONDON, February 14, 2011 /PRNewswire-FirstCall/ -- Spread betting on currency pairs is one of the most popular ways of speculating on financial markets without purchasing underlying shares. Spread betting provider City Index (http://www.cityindex.co.uk/) provides trading on over fifty currency pairs on the foreign exchange, also known as FX or forex. Like any form of trading, it pays to be as prepared as possible when you spread bet, so here are four things you need to know about forex:

1) A Multitude of Options

City Index cites GBP/USD, EUR/USD and USD/JPY as the FX pairs most popular with its spread bettors, although this may be at least partly due to the company's competitive daily rolling spreads for EUR/USD at 2 points and GBP/USD at 3 points. In reality there are dozens of major, minor and exotic currency pairs on which you can spread bet, including sterling, US dollar, yen, euro, Swiss franc, Australian dollars and many more.

2) A Balanced Market

One advantage of spread betting currencies is that the market as a whole can never be "bear" or "bull". This is simply a matter of balance. If one currency is on the rise (bull), then at least one other must be going down (bear) for it to be doing so.

3) Several Influencing Factors

In currencies spread betting, trades are based on the exchange rate between two currencies, such as GBP/USD. The price movements of these currency pairs can be influenced by a huge variety of factors, including the relative strength and weakness of a currency, economic data, political decisions, social unrest and more.

4) Always Have a Plan

As with any form of spread betting, FX trading requires you to manage your risk carefully and spread bet using a considered strategy. The currency markets can be volatile, so always use a stop loss, outline a profit target and know exactly how much you are prepared to lose before you place the spread bet.

    For more on currencies spread betting, visit:
http://www.cityindex.co.uk/range-of-markets/Currencies-Spread-Betting.aspx

To learn more about spread betting in general, consider attending one of City Index's free seminars:

http://www.cityindex.co.uk/learn-to-trade/seminars.aspx

Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for differences (CFDs) and, in the UK, spread betting.

We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. For more information on currencies spread betting, visit:

http://www.cityindex.co.uk/range-of-markets/Currencies-Spread-Betting.aspx

SOURCE City Index