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Currency Market Trading

Published on: 20/11/2016

International currency trading has recently become a common feature on many betting websites. The world’s currencies are traded on a daily basis and this creates an opportunity for smart speculators to make gains on the small changes between the value of one currency and another.

The platform on which currencies are traded between investors and bankers is known as the Forex (foreign exchange market) and is often referred simply as FX. The FX is the most traded market in the world with business being conducted around the clock between Monday and Friday. Forex is referred to as an “over-the-counter market,” which means has no central exchange unlike commodities and stocks. Most currencies are traded in pairs, so a trader will purchase one currency while selling another. The majority of these transactions are made using the most liquid currency formats, often referred to as the “majors” in FX circles. Trades between the Euro and the US Dollar, the British Pound and the US Dollar, and the Euro and the British pound are amongst the most common.

Trade combinations between the Japanese Yen, Swiss Franc, Canadian Dollar and Australian Dollar are also popular. Outside of the major currencies, traders may also buy and sell what are known as “exotic” pairs. These currencies are less popular and include denominations such as the Singapore Dollar, the Mexican Peso and the Polish Zloty amongst other.

The popularity of Forex trading is driven by the highly liquidity of the markets. Tight spreads are common between investors when compared to other asset markets, with the major currencies retaining the most liquidity of all.

Betting on the currency markets is not exactly the same as FX trading and does not require the punter to actually purchase or sell any currencies. Currency market betting simply requires the bettor to predict the range or degree of change in value between a pair of currencies over a specific time period.

Many well-known bookies now offer fixed odds betting on FX markets on their websites. Current rates are displayed and punters can predict rises or falls in value over time periods from just a few minutes to a full day. The systems are automated and pay-outs are made within seconds of the deadline expiration time.

Other specialist websites offer spread betting on FX markets where punters can buy or sell points above or below the current rate from as little as 50p. In this scenario, a rise or fall of 10 points could win or lose £5 depending on whether the prediction was correct. The popularity of Forex trading has seen a huge rise in the number of online platforms offering this type of service. Many traditional sports bookmakers such as William Hill have also added forex and commodities betting options to their line-ups.

Published on: 20/11/2016 © Bet Bind