Foreign Exchange
The foreign exchange market is the largest, most liquid and widely traded market in the world. At ETX Capital we offer customers access to over 70 currency pairs.
Trading Example
A Foreign Exchange deal is when you simultaneously buy one currency and sell another. The dealing rate has 2 quotes, a buying price and a selling price. The difference in the 2 prices is called the 'spread'.
It is important to remember that you will always be dealing on the basis of the movement of the first named currency of your quoted currency pair making spread trading on Forex quite straight-forward.
An ETX Capital customer thinks that the Euro will appreciate against the U.S Dollar and places a spread bet on the EUR/USD currency pair.
The quote to the customer for EURUSD (EURO vs U.S Dollar) is 1.4759 / 1.4761. The customer buys £1 per point at 1.4761. Having bought Euros the customer has immediately sold Dollars. For every point that EURUSD goes above 1.4761 the customer will make £1 and for every point that EURUSD moves below 1.4761 the customer will lose £1.
If the customer had thought that the Euro would depreciate against the U.S Dollar then he could have sold Euros (simultaneously buying Dollars) at 1.4759. If he had staked the same £1 per point then for every point that EURUSD fell below 1.4759 he would be making £1 and for every point that EURUSD moved above 1.4759 he would be losing £1.
Profit and Loss Calculation
The Euro has appreciated against the US Dollar and is now being quoted 1.4785 / 1.4787 and the customer decides to exit his initial Buy position (1.4761) by selling £1 per point at 1.4785.
P/L = T x S
P/L = Profit/Loss
T = Tics
S = Stake
The customer has made £24 (1.4785 - 1.4761 = 24 tics x £1 per point = £24). Had the market fallen then the customer would have incurred a loss and as with all spread betting there is a chance that the losses made can outweigh the initial traded stake.
- Australian Dollar / Japanese Yen
- Australian Dollar / New Zealand Dollar
- Australian Dollar / US Dollar
- Canadian Dollar / Japanese Yen
- Swiss Franc / Japanese Yen
- Euro / Australian Dollar
- Euro / Canadian Dollar
- Euro / Danish Kroner
- Euro / Swiss Franc
- Euro / Sterling
- Euro / Japanese Yen
- Euro / Norwegian Kroner
- Euro / New Zealand Dollar
- Euro / Swedish Kroner
- Euro / US Dollar
- Sterling / Australian Dollar
- Sterling / Canadian Dollar
- Sterling / Swiss Franc
- Sterling / Euro
- Sterling / Japanese Yen
- Sterling / Norwegian Kroner
- Sterling / New Zealand Dollar
- Sterling / Swedish Kroner
- Sterling / Singapore Dollar
- Sterling / US Dollar
- New Zealand Dollar / Japanese Yen
- New Zealand Dollar / US Dollar
- New Zealand Dollar / Swiss Franc
- US Dollar / Canadian Dollar
- US Dollar / Swiss Franc
- US Dollar / Danish Kroner
- US Dollar / Hong Kong Dollar
- US Dollar / Japanese Yen
- US Dollar / Norwegian Kroner
- US Dollar / Swedish Kroner
- US Dollar / Singapore Dollar
- US Dollar / South African Rand
Near and Far Quarter Forwards
- Australian Dollar / Japanese Yen
- Australian Dollar / New Zealand Dollar
- Australian Dollar / US Dollar
- Euro / Swiss Franc
- Euro / Sterling
- Euro / Japanese Yen
- Euro / US Dollar
- Sterling / Swiss Franc
- Sterling / Euro
- Sterling / Japanese Yen
- Sterling / US Dollar
- New Zealand Dollar / Japanese Yen
- New Zealand Dollar / US Dollar
- US Dollar / Canadian Dollar
- US Dollar / Swiss Franc
- US Dollar / Japanese Yen
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