Forex trading

A forex CFD is a contract for difference that is used to speculate on the foreign exchange market.

Just like traditional forex trading, when you trade a forex CFD you’re effectively buying one currency in a pair while selling the other. But instead of taking ownership of any actual currency, you’re agreeing to exchange the difference in price of your chosen currency pair from when your position is opened to when it is closed.

Find out more about CFD trading.

A forex spread bet is a bet on the direction in which a currency pair’s price is headed. The further the pair moves in your chosen direction, the more profit you make. But the further it moves against you, the greater your loss.

If you bet £5 per point on EUR/USD to increase in price (called going long), for instance, then for every point of upward price movement in eurodollar, you’d make £5. For every point of downward movement, you’d lose £5. Any profits or losses would be realised once the position is closed.

There are two main ways to get started forex trading: via an FX broker, or via derivatives like spread betting or CFD trading.

To a forex trader, they offer very similar benefits. All are leveraged, allow you to take both long and short positions, and are charged via a spread.

However, there are a few benefits to trading forex via CFDs or spread betting. Spread betting is tax-free in the UK,¹ for instance, and both spread betting and CFD trading offer access to a huge range of markets alongside forex. These markets can typically include indices, shares, commodities, cryptocurrencies and more.

Find out more about how to trade forex using CFDs or spread betting, or create an account to get started right away.