CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Learn To Trade
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Affiliate Programme

Grow your business and get rewarded. Find out more about our Affiliate Programme today.

Learn more
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn more
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn more
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn more

Plug into the next-gen platforms and the trades your clients want.

Partner Portal
About ThinkMarkets

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more

Discover a range of rewarding career possibilities across the globe

Apply now
Security of Funds

Security of your funds is our number one priority. We safeguard our Client funds in top tier banks.

Learn more
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

How to Spread Bet

Spread betting on forex may seem daunting on the outside, but let us break it down for you as much as possible in the section below.

Understanding the basics

In order to trade forex, you have to trade two currency pairs against each other (for example EUR/USD - the Euro vs US dollar). In this pairing, EUR is known as the base currency, and USD as the quote currency.

Base Currency

Quote Currency

You would speculate on whether the base currency will strengthen (appreciate) or weaken (depreciate) against the quote currency. If you think the base currency will appreciate, then you should go long (buy), and if you think the base currency will depreciate, you should go short (sell).

After choosing whether to go long or short, the currencies will fluctuate based on multiple factors until you decide to close the position. This will determine the profit or loss you make on the trade.

Influencing factors on the forex market

There's number of reasons why forex pairs move so much (this movement is known in the industry as volatility.) Here's a few volatility-causing factors you should be aware of when forex trading:

Financial news events

Large financial news events, such as budgets, interest rates and unemployment announcements can significantly increase volatility in the markets, especially in local currencies where the announcement is being made.

Political economic stability

The welfare of a country or nation can have major impact on the performance of a currency. If a country is struggling economically, it's extremely likely its associated currency will be too.

Natural disasters

As horrible as they are, natural disasters can affect a currency's wellbeing as well as people's lives. Should an earthquake or tsunami occur, expect some sort of volatility to be generated in the currency associated with that region.

Points mean profit (or loss)

In spread betting, the movement of a market is measured in points. The amount of points a market moves determines how much profit or loss you’ll make in a trade. Whenever you open a trade, there will be a difference between the bid and ask prices – this price difference is known as a spread. The market will need to move a certain number of points so that it passes the bid or ask price before you can earn any profit. You’ll need to factor this in when placing a trade, but luckily for you we offer highly competitive spreads across all markets to try to maximise your profit. Also don’t forget that spread betting is currently exempt from both UK Capital Gains Tax and stamp duty*, which can further increase your potential profit.

Trade rising and falling markets

Unlike traditional shares trading, in financial spread betting you have the possibility to trade both a rising and falling market. Should you think the market will rise (appreciate), you can buy (go long), and similarly if you think the market will fall (depreciate), you can sell (go short). Should the market move in favour of your trade, you will earn a profit. However, should the market move in the opposite direction, you will incur a loss.

Risk warning: losses can exceed your initial deposit. Please ensure you fully understand all risks involved and seek independent advice if necessary.

Spread bet examples

Here’s a couple of examples of how you can make a profit or loss from spread betting:

Example One

We identify a pattern in GBP/USD (Cable) and decide to buy 2 pounds per point of Great British pound (GBP) against the US dollar (USD) at a price of 1.4330.

The margin required for the position will be 2* (1.4330 * 10 000) / 200 = 143.3 GBP.

The market starts moving in our direction and we close for a 30 pip profit at 1.4360.

Since we’re trading at 2 pounds per pip, the profit for this position is 30*2 = 60 GBP

Example Two

EUR/USD is stuck in a range for three days, and close to the bottom of the range. We want to buy at this short-term support level.

We buy 4 pounds per point of EUR/USD at 1.1050

The margin for the positions will be 4* (1.1050*10 000) / 200 = 221 GBP.

To protect ourselves against a breakout of the range to the short side, we place a Stop Loss at 1.1010

During the US session, a news announcement brings some volatility to the markets causing the EUR/USD to break the range to the downside, taking out our Stop Loss.

We had 4 spread bet contracts, so the loss we made is 40 pips * 4 = 160 GBP

Back to top