Spread Betting Currency Futures

These can be somewhat confusing at first because they often have an inverse relationship to the spot currency rate. For example, in the futures market instead of being listed a Dollar/Yen contract it is listed as Yen/Dollar.

So if the spot rate of Dollar/Yen is 116.58 this may well equate to a price of 0.8588 in the Yen/Dollar futures price.

If it sounds confusing there is an easy way to remember which way you are trading the currency cross. If you buy a currency spread bet you are always buying the currency that is first quoted. So if you want to buy the Dollar against the Yen in the spot market, you are buying dollars and selling yen. If you wanted to buy the Dollar and were trading the Chicago futures price (spread bet based on the future) then you would sell because it is quoted Yen/Dollar.

Some good advice here is to look at both the spot and futures contract prices for a day or two and you'll soon understand how they both move.

With currency futures not all of the spot cross rates listed above are available. The crosses that are available are listed below;

• Euro/US Dollar
• Sterling/US Dollar
• Swiss Franc/US Dollar
• Yen/US Dollar
• Australian Dollar/US Dollar