ETX Capital provides online Forex trading for both rolling daily and near and far quarter forward positions, giving you plenty of flexibility.
You will be able to place spread bets on a wide selection of currency pairs, with popular and more exotic monetary units available.
Here is a list of our FX products:
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What is Forex trading?
Foreign exchange - also known as Forex or FX - trading is a way to speculate on fluctuations in global currency markets.
All Forex trades are carried out in currency pairs, with the first-named unit known as the ‘base currency’ and the second called the ‘quote currency’.
So, if you see a listing of EUR/USD, this means the euro is the base currency and the US dollar is the quote currency. You always deal with movement of the base currency in Forex trades.
Traditionally, Forex markets were dominated by large, international financial institutions; however, spread betting and other forms of trading have made them more accessible to a wide range of investors.
Forex spread betting enables investors to profit from a rising or falling market because you speculate on the number of points - or pips - of movement between two currencies, rather than purchasing a large amount of a particular monetary unit.
All about Forex trading
Forex markets are the most widely traded and highly liquid in the world, with an average daily turnover of almost $4 trillion (£2.5 trillion).
It is also one of the few 24-hour markets in the world, opening at 21:30 GMT on a Sunday evening - when the market opens in Sydney, Australia - and closing at 21:15 GMT on a Friday evening, when business ends in New York, USA.
Although there are dozens of currencies on which you can trade, five of the most regularly traded units are the US dollar (USD), euro (EUR), Japanese yen (JPY), British pound (GBP) and Swiss franc (CHF).
Some currency pairs are less volatile than others, so it pays to do some research before you begin trading in order to find a combination that will suit your appetite for risk.
There are many factors that can affect foreign exchange rates, including interest rates, inflation, political conditions, economic growth and national trade balances.
A Forex spread betting example
Forex spread betting is a relatively simple concept in that as a trader, you simply have to decide whether the base currency will rise or fall in value against the quote currency.
When you have selected a pair on which to bet, you will be given two prices by ETX Capital - the bid price and the offer price. The former is always the lower of the two figures quoted and the difference between the two is known as the spread.
Ideally, you want a tight spread - i.e. a small difference - as this means you will require less price movement in order to realise a profit, or a loss if things go against you.
There are two types of Forex spread bets you can make - a spot or rolling daily trade for short-term fluctuations or a forward bet which relates to currency values over a longer period of time.
Here is an example of a spot Forex spread bet:
You have chosen the EUR/USD currency pair for your bet.
The quote is 1.3762/1.3764 - remember the bid price is the first named and the offer price is the second.
You believe that the euro will appreciate in value against the dollar, so you buy at the offer price (1.3764), betting £1 per point of movement.
At the end of the day, the spread is 1.3860/1.3862, so you would close your position by selling at the bid price (1.3860).
This means the euro has risen in value by 96 points, so you have achieved a profit of £96.
However, when spread betting you always need to remember that prices can move down as well as up, so if the markets had moved the other way, you would have made a loss on your trade.
The spreads indicated are fixed and represent the total spread during normal market conditions. However, they are subject to change during volatile or illiquid underlying market conditions.
2. Trading hours
These are the usual hours of business but may vary where daylight saving applies or where there is a market holiday. All times are expressed as London time.
3. Basis of settlement
Positions left to expiry will be closed basis the settlement price plus ETX Capitals bid or offer spread.
Futures positions can be rolled over before the expiry of the contract.
ETX Capital will close the open position at the current bid/offer price for that contract and open the new position at the mid price of our current quote for the next contract month.
Overnight Finance Adjustment
If you hold a position overnight in a rolling daily FX market a finance adjustment is made to your account.
The rollover adjustment comprises of a market interest adjustment, which is set by the underlying market and usually referred to as the Tom/Next level, and an ETX Capital rollover charge.
The market interest rate adjustment takes into consideration the difference between the two currencies interest rates.
If the first currency has a higher interest rate then you may be credited interest for running a long position and debited interest for running a short position.
If the first currency has a lower interest rate, then you are debited interest for running a long position and may be credited interest for running a short position.
Please note that the crediting of interest following the rules above is dependant on the market interest rate adjustment being greater than ETX Capitals rollover charge.
The daily financing fee will be applied to your account each day that you hold an open position (including weekends and holidays).