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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. We use a range of cookies to give you the best possible browsing experience.
By continuing to use this website, you agree to our use of cookies. You can view our cookie policy and edit your settings here , or by following the link at the bottom of any page on our site. View more search results. Trading forex on the spot is a popular choice for many financial traders. Find out how you can trade spot FX and how it differs from forex options and forwards. Start trading today. Call or email newaccountenquiries.
Contact us: When trading spot forex , you buy and sell the currency pair at the current market rate, known as the spot price. Forex trading is a way to speculate on international currencies without taking ownership of the physical assets. You can choose between spot currency trading, FX options or FX forwards.
Many individuals prefer trading forex on the spot because it generally costs less to open a position due to narrower spreads, meaning it can be a more cost-effective way to take short-term positions on the underlying market. When you trade spot FX, you are trading a currency pair. This means you are buying one currency base currency while selling another quote currency because you believe one of the currencies will strengthen against the other.
You will buy the currency pair — go long — if you think the base currency will rise in value against the quote. You will sell the currency pair — go short — if you think the quote currency will rise in value against the base. Spot forex trading is popular among day traders because spreads are generally lower than those available when trading FX forwards. However, overnight funding charges apply if you want to keep your position open until the next day.
Besides trading spot forex, you can also trade forex forwards or options. This table explains the difference between the three methods. Spot prices reflect the underlying market but with no fixed expiries, making them suitable for both beginners and experienced traders. Both are derivative products, which means you only need a small deposit — called margin — to open a position. Explore spread betting and learn how you can use it to speculate on positive or negative market movements. Learn about trading contracts for difference, and see how you can trade the markets using this derivative.
Interested in opening an account? Contact or newaccountenquiries. Email newaccounts. Marketing partnerships: marketingpartnership ig. Professional clients can lose more than they deposit. The market consists of price makers who make the prices , price takers who take the prices , intermediaries like brokers who assist the market by transmitting the prices and placing orders, and clients who place orders at specific levels. Prices are only valid for a few seconds before they change either because the market has traded on the quoted price or a new order replaces the existing price.
When you trade on the quoted price then you have entered into a binding contract with the counterparty.
Settlement is normally 2 working days after the trade date. If you sell USD then you must ensure your counterparty receives the agreed USD amount on their account in 2 working days, and you receive the agreed EUR amount on your account in 2 working days. Trade settlement is very important and means that you must have a complete operational procedure in placing to effect settlement, establish positions, agree counterparties, have trading limits etc. Traditionally spot FX trades were done with banks. Now trades can also be transacted via electronic exchanges, electronic brokers etc.
It is always important to know who your counterparty is — it could be that your internal operational control prohibits you from trading with specific counterparties. Most major currencies can be traded against each other without restrictions such as exchange control.
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Common methods of executing a spot foreign exchange transaction include the following: [1]. This means you can avoid going through the delivery process and can readily trade out of the position during the current trading session. Should you wish to keep the position open or rollover you must enter into a swap transaction involving your forex pair. The market operates around the clock Monday to Friday. Your broker or market maker might quote you an exchange rate of 1. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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A spot trade is the purchase or sale of a foreign currency or commodity for immediate delivery. In the spot FX, the price is also determined at the point of trade, but the physical exchange of the currency pair takes place right at the point of.