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  • Currencies (FX)

    Forex trading - also known as FX or currency trading – is the most heavily traded market in the world, with approximately $5 trillion traded every day. FX trading offers you the ability to trade currency pairs like the British pound against the US dollar or the euro and potentially profit from any change in the exchange rates.

    Spreads and Margins

    Spread betting on currencies enables you to trade both rising and falling prices on hundreds of fast-moving currency pairs.

    You can spread bet major, minor and exotic currency pairs with some of the tightest spreads around. We offer spreads starting at just 0.5pts (variable) on some of the most popular currency pairs such as EUR/USD and USD/JPY... Find out more about Variable Spreads.

    Our Forex margins starts from just 0.50% on EUR/USD and GBP/USD currency pairs.

    You can trade currencies with all our account types, including Beginners, Standard and Limited Risk.

    FX Majors Spreads

    You can now trade the FX Majors with spreads starting from just 0.5pts for EUR/USD and USD/JPY, and just 0.8pts for GBP/USD. Our average spreads are also some of the most competitive in the industry, with a 24-hour average spread for EUR/USD of just 0.72pts*.

    Example of some of our tight FX spreads:


    Currency Min. Spread* Avg. Spread
    EUR/USD DFT 0.5pts 0.72pts
    AUD/USD DFT 0.5pts 0.76pts
    USD/JPY DFT 0.5pts 0.89pts
    GBP/USD DFT 0.8pts 1.36pts
    EUR/GBP DFT 0.8pts 1.2pts
    EUR/JPY DFT 1.4pts 2.02pts
    USD/CHF DFT 1.4pts 2.00pts
    USD/CAD DFT 1.7pts 2.26pts
    NZD/USD DFT 2.1pts 2.65pts
    EUR/CHF DFT 1.6pts 2.34pts

    * * Spreads may vary according to the underlying market spread, market conditions and liquidity. The average spread is the 24-hour mean average of all prices quoted in the three weeks to the 30th November 2016.

    Margin rates in the table above represent the first step for margin factors in each specific market. Margin factors will increase the more you trade, as identified by each step margin. For more information, please see market information via the trading platform.

    What Affects Forex Prices? 

    Forex prices are influenced by a multitude of factors, from international trade or investment flows to economic or political conditions and country credit ratings. High market liquidity means that prices can change rapidly in response to news and short-term events, creating multiple trading opportunities for retail forex traders.

    Some of the key factors that influence forex prices are: 

    • Political and economic stability 
    • Monetary policy 
    • Currency intervention 
    • Natural disasters (earthquakes etc)

    See our spread bet examples page located in our how to spread bet section for more information on how you can spread bet currencies.

    Pricing

    All forex is quoted in terms of one currency versus another. Each currency pair has a ‘base’ currency and a ‘counter’ currency. The base currency is the currency on the left of the currency pair and the counter currency is on the right. For example, in EUR/USD, EUR is the ‘base’ currency and USD the ‘counter’ currency.

    Forex price movements are triggered by currencies either appreciating in value (strengthening) or depreciating in value (weakening). If the price of EUR/USD for example was to fall, this would indicate that the counter currency (US dollars) was appreciating, whilst the base currency (euros) was depreciating.

    When trading forex prices, you would buy a currency pair if you believed that the base currency will strengthen against the counter currency. Alternatively, you would sell a currency pair if you believed that the base currency will weaken in value against the counter currency. Some examples of major currency pairs are:

    • EUR/USD (The value of 1 EUR expressed in US dollars)
    • USD/CHF (The value of 1 USD expressed in Swiss francs)

     

    Spread

    The difference in the BID/ASK of the currency pairs is referred to as the 'spread'. An example would be EUR/USD dealing at 1.03800/1.03805(in this case the spread is 0.5pts or 0.00005). The exceptions to this are the JPY pairs which are quoted to just 2 decimal places. A USD/JPY price of 117.413/117.422 displays a 0.9pt spread.

    Benefits of our Forex spreads

    We want Finspreads spread bettors to trade the the lowest possible spreads at all times of the day. That's why we offer tight spreads for our most popular currency pairs such as GBP/USD and EUR/USD. The average spreads quoted above are an average taken over a 24-hour period, which includes the overnight trading sessions when spreads can be wider – therefore the actual average spread you will get ‘in-hours’ could be much lower.

    1) Tight Spreads

    You can trade popular forex pairs such as EUR/USD with a tight, variable spread of just 0.5pts and GBP/USD from just 0.8pts, meaning your overall trading costs can be considerably lower than trading with another broker.

    2) Cheaper to Trade Around Key Economic Events 

    Trading around events such as the Non-Farm Payrolls or GDP figures can trigger sharp swings in FX prices. Using our tight variable spreads, you can trade these events much more efficiently.

    3) Price Improvement Technology

    Slippage is common in the forex markets, particularly when prices are moving quickly. Price Improvement Technology enables us to execute trades at better levels if prices move in your favour by the time your trade is placed.

    What is Slippage?

    In volatile markets, prices can move around very quickly and the price you try to trade at isn’t always the price you get. The difference between the expected opening price of a trade and the price at which the trade actually executes is called slippage. Price Improvement Technology enables us to execute trades at better levels if prices move in your favour by the time your trade is placed.

    For example, if the EUR/USD bid price is 1.0352 when the trade is executed and the price improves to 1.0353 (one pip improvement), the trade will be executed at the improved price of 1.0353.

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