Wednesday 19th June 2013 08:13 PM
Trade Forex, Metals, Oil, and Stock Indices tax-free* with FXCM LTD. by opening a Spread Betting account. Spread Betting accounts operate exactly like standard FXCM LTD. accounts, but enjoy special tax-free* status in the UK and Ireland. The minimum to open a live account is £50. Only available to residents of the UK and the Republic of Ireland. Every time you spread bet forex with FXCM LTD, we will trade in an underlying market to hedge your bet on a one-to-one basis. If you open a long spread bet in EUR/USD, for instance, FXCM LTD. will take a corresponding long position in the same currency pair. Therefore, from the time of the trade confirmation, the outcome of your trading has no effect on FXCM LTD's profit or loss.
Spread betting allows you to bet on the price fluctuations of various financial markets. Spread Betting accounts operate similar to the standard FXCM LTD accounts, but enjoy special tax-free* status in the UK and Ireland. The minimum to open a live account is £50. Only available to residents of the UK and the Republic of Ireland. Spread betters at FXCM have access to trade over fifty currency pairs, indices, oil and metals. The goal of spread betting is similar to the goal of stock trading where you attempt to "buy low and sell high". Rates fluctuate up and down throughout the day, provide spread betters with trading opportunities.
What is the Rollover for Forex? Rollover is the interest paid or earned for holding a position overnight. Each currency has an interest rate associated with it, and because forex is traded in pairs, every spread bet involves not only two different currencies, but their two different interest rates. If the interest rate on the currency you bought is higher than the interest rate of the currency you sold, then you will earn rollover (positive roll). If the interest rate on the currency you bought is lower than the interest rate on the currency you sold, then you will pay rollover (negative roll). Rollover can add a significant extra cost or profit to your spread bet.
Rollover Forex Examples? When you buy the EUR/USD pair, you are buying the euro, and selling the U.S. dollar to pay for it. If the euro interest rate is 4.00%, and the U.S. rate is 2.25%, you are buying the currency with the higher interest rate, and you will earn rollover -- about 1.75% on an annual basis. If you sell the EUR/USD pair, you are selling the currency with the higher interest rate, and you will pay rollover -- about 1.75% on an annual basis, since you are paying the euro interest rate and earning the U.S. interest rate.
Some Brokers trade against their clients and re-quote in order to make money on your trades. That is a conflict of interest. FXCM will not interfere in your trading by re-quoting your trades. After you send FXCM an order, your position is executed as soon as our hedge is established. This means that the order you placed is filled without re-quotes during most market conditions. Many market makers issue re-quotes, and sometimes for legitimate reasons. But re-quoting carries the potential for conflict of interest between the market maker and the client. If a market-making firm finds it cannot make money on your trades, it may provide you with an aggressive re-quote, regardless of the true market price. To avoid any conflict, FXCM will never re-quote you another price. Our dealers simply ensure that every client order we receive is hedged. Since all spread bets are hedged real-time in their various underlying markets, FXCM's spread can vary.
Most Spread Bet brokers have a minimum trade size of 1 GBP a point. However with FXCM traders have more flexibility and can trade as low as 6p a point across major FX pairs. This gives traders the precision to pinpoint the exact trade size they're looking to place in the market; as well as the ability to easily scale in and out of positions.
FXCM's No Dealing Desk Forex Execution aims to provide transparent and fair execution. Every trade is executed back to back with one of multiple liquidity providers, which compete the provide FXCM with bid and ask prices. The best spreads available to FXCM are streamed to you with a markup, which is how FXCM is compensated.
Some spread betting brokers profit when a client is liquidated. If the broker has not hedged your position and you have lost all your money, theoretically the broker can keep that money even when your trades have not even left their trading platform. However, when you trade with FXCM's no dealing desk forex execution, we hedge your position with a bank, a broker dealer or any other liquidity provider. If you are liquidated, we simultaneously liquidate our hedge position. FXCM may or may not offset individual transactions in Oil, Metals and Stock Indices; therefore, the execution of these products may differ in comparison to the execution of currency pairs. It is FXCM's policy to credit accounts to a zero balance when debit balances occur as a result of trading. One of the greatest concerns traders have about leverage is that a sizable loss could result in owing money to their broker. At FXCM, your maximum risk of loss is limited by the amount in your account. All accounts are tracked by our "Margin Watcher" feature. With the Margin Watcher feature, if account equity falls below margin requirements, the FXCM Trading Station will trigger an order to close all open positions
Spread betting is only available for individual investors, and is free of stamp duty and UK capital gains tax. In addition, spread betting is a way to make efficient use of trading capital for UK and Ireland residents. Whichever way the markets move, you can take a position to benefit from the movement—and for only a fraction of the capital outlay that would be required to trade the market directly. Financial spread betting is a leveraged product, which means that you only have to put up a percentage of the total value of the position. (Typical spread bet margins with FXCM vary between 1% and 10%.) Margin trading is not necessarily for everyone because leverage can magnify losses as well as gains. Please consult an investment adviser to enquire about your own personal circumstances.