Definition Of Spread Betting In Forex

Definition of spread betting in forex

  • Free Annual Reports
  • Register
  • Sign in

Sign in


Forex Spread Betting

AAA | 

DEFINITION of ‘Forex Spread Betting’

A category of spread betting that involves taking a bet on the price movement of currency pairs.

Learn more

A company offering currency spread betting usually quotes two prices, the bid and the ask price – this is called the spread. Traders bet whether the price of the currency pair will be lower than the bid price or higher than the ask price.

Definition of spread betting in forex

The narrower the spread, the more attractive the currency pair. Like spread betting,  traders do not need to actually own any currency.


A brokerage firm quotes an ask price for the EUR/USD pair at 1.0015 and a bid price at 1.0010. If you as a trader believe that the Euro will strengthen compared to the USD, you could « bet » EUR 0.5 for every point (Pip) the Euro increases above 1.0015.

Genting sp perps ipo price

If the EUR/USD after a certain period of time came to $1.0025, you would receive EUR 5. If the price of the Euro was instead $1.0005, you would end up losing EUR 5.


Day Trading
Forex Terminology
Forex Trading Strategies
Range Trading

License Content
Order Reprints

Follow Term Of The Day:



  • WM/Reuters Benchmark Rates

    Spot and forward foreign exchange rates that are used as standard …

  • Sterilization

    A form of monetary action in which a central bank seeks to limit …

  • Money Market Hedge

    A practice that businesses engaging in foreign trade use to eliminate …

  • Currency Depreciation

    A decrease in the level of a currency in a floating exchange …

  • Exposure Netting

    A method of hedging currency risk by offsetting exposure in one …

  • Active Trading

    The buying and selling of securities with the intention of holding …


  • Where did the term 'pip' in currency exchange come from?

    The term pip is an acronym for percentage in point or price interest point.

    It measures a unit of change within a pair of … Read Full Answer >>

  • Why is the Vortex Indicator (VI) important for traders and analysts?

    Doug Siepman and Etienne Botes developed the vortex indicator to anticipate reversals in price trends.

    They believed that … Read Full Answer >>

  • How do I implement a forex strategy when spotting a Upside Gap Two Crows Pattern?

    The upside gap two crows is, in theory, a bearish reversal pattern found in both the stock and forex markets.

    About OANDA

    While there … Read Full Answer >>

  • What is a common strategy traders implement when using the Trade Volume Index (TVI)?

    The trade volume index (TVI) indicates whether an asset is being accumulated or sold. It is calculated using intraday tick … Read Full Answer >>

  • What are the most common market indicators forex traders follow?

    There are literally hundreds of technical indicators for forex traders to choose from, however, there are a few which may … Read Full Answer >>

  • What is the difference between pips, points, and ticks?

    Point, tick and pip are terms used to describe price changes in the stock market and other markets.

    The worlds best cryptocurrency

    While traders and analysts … Read Full Answer >>

  • Related Articles

  • Active Trading Fundamentals

    Where And How Should You Make Your First Trade?

    New traders should enter markets that offer the greatest opportunity for learning their craft while keeping risk at a minimum.

  • Trading Strategies

    High-Frequency Trading Regulations

    Current regulations on high-frequency trading, and possible future ones.

    Definition of spread betting in forex

    How some people think high-frequency trading should be regulated or illegal.

  • Trading Strategies

    The World's 10 Most Famous Traders Of All Time

    A review of the most famous and infamous traders in history.

  • Trading Strategies

    How Useful Is the CFA For A Day Trading Career?

    Definition of spread betting in forex

    We take a look at how useful the Chartered Financial Analyst certification is for those wanting to start a career in day trading.

  • Trading Strategies

    Best Undergraduate Degrees For Day Traders

    We look at some popular undergrad majors for those wanting to begin a career in the exciting world of fast-paced trading.

  • Trading Strategies

    Why & How To Reevaluate Your Trading Strategy At Midday

    Take a step back at the lunch hour and reevaluate the trading day.

    DEFINITION of ‘Forex Spread Betting’

  • Trading Systems & Software

    Brokerage Reviews: TradeStation Vs. Interactive Brokers

    These are among the most sophisticated brokers in the industry in terms of investment offerings, market access and technology.

    Definition of spread betting in forex

  • Trading Strategies

    Trade Forex Through Inside Day Breakout Strategy

    Inside day breakout is a popular strategy for forex trading. Here's how to recognize the patterns, entry/exit points and trading scenarios.

  • Trading Strategies

    How to Do the Fundamental And Technical Combo Trade

    Fundamental and technical analyses should be viewed as complementary rather than competing practices.

    What is the spread - Forex Training Courses - Plan B Trading

    When combined, these two methods can greatly strengthen your game.

  • Mutual Funds & ETFs

    How Trading ETFs is Different from Trading Stocks

    We explain when ETFs may be better suited than stocks for inclusion in a portfolio.

    INVESTOPEDIA EXPLAINS ‘Forex Spread Betting’

  • You May Also Like


    Hot Definitions

  • Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors.

    The alternative …

  • Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless …

  • Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers …

  • Unsystematic Risk

    Company or industry specific risk that is inherent in each investment.

    The amount of unsystematic risk can be reduced through …

  • Security Market Line – SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky …

  • Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, …

  • Trading Center


    • Dictionary:
    • #
    • a
    • b
    • c
    • d
    • e
    • f
    • g
    • h
    • i
    • j
    • k
    • l
    • m
    • n
    • o
    • p
    • q
    • r
    • s
    • t
    • u
    • v
    • w
    • x
    • y
    • z
    • Content Library
    • Articles
    • Terms
    • Videos
    • Tutorials
    • Slideshows
    • FAQs
    • Calculators
    • Chart Advisor
    • Stock Analysis
    • Free Annual Reports
    • Stock Simulator
    • FXtrader
    • Exam Prep Quizzer
    • Net Worth Calculator
    • Connect With Investopedia
    • Work With Investopedia
    • License Content
    • Advertise With Us
    • Write For Us
    • Email Deployment
    • Contact Us
    • Careers
    • INV Sweden

    © 2015, Investopedia, LLC.

    All Rights Reserved
    Terms Of Use
    Privacy Policy


    Forex Spread Betting Definition | Investopedia

    Streets of rage remake best video options