Forex is the most traded market in the world, and spread betting is the most tax-efficient way for UK traders to access it. Here is everything you need to know about forex spread betting.
How Forex Spread Betting Works
When you spread bet on forex, you are speculating on the movement of one currency against another. For example, if you buy GBP/USD at 1.2650, you are betting that the pound will strengthen against the dollar. Your profit or loss is calculated in pounds per pip (the smallest price increment, usually the fourth decimal place).
Major Currency Pairs
| Pair | Name | Typical Spread | Best Hours (GMT) |
|---|---|---|---|
| EUR/USD | Euro Dollar | 0.6-1.0 pips | 08:00-16:00 |
| GBP/USD | Cable | 0.9-1.5 pips | 08:00-16:00 |
| USD/JPY | Dollar Yen | 0.7-1.0 pips | 00:00-09:00, 13:00-16:00 |
| EUR/GBP | Euro Sterling | 0.9-1.5 pips | 08:00-16:00 |
| AUD/USD | Aussie | 0.6-1.0 pips | 00:00-06:00, 13:00-16:00 |
Trading Sessions
Forex trades 24 hours a day, five days a week. The three major sessions are:
- Asian session (00:00-08:00 GMT) — lower volatility, JPY and AUD pairs most active
- London session (08:00-16:00 GMT) — highest volume, GBP and EUR pairs most active
- New York session (13:00-21:00 GMT) — USD pairs most active, overlaps with London for peak liquidity
The London-New York overlap (13:00-16:00 GMT) is the most liquid period and typically offers the tightest spreads.
Best Forex Spread Betting Brokers
Pepperstone — Tightest Forex Spreads
Pepperstone consistently offers the tightest forex spreads, from 0.0 pips on EUR/USD with their Razor account. Combined with cTrader and MT4/MT5, they are the top choice for serious forex traders.
IG — Widest Forex Range
IG offers over 80 forex pairs, more than any other UK spread betting provider. Spreads from 0.6 pips on EUR/USD. Ideal if you want to trade exotic pairs alongside the majors.
OANDA — Forex Specialist
OANDA is a dedicated forex broker with deep liquidity and competitive pricing. Their proprietary platform includes advanced charting and analysis tools specifically designed for forex trading.
Forex Margin Requirements
FCA rules set a maximum leverage of 30:1 for major currency pairs and 20:1 for minor pairs. That means you need a minimum 3.33% margin for majors. On a £10,000 GBP/USD position, the margin requirement is approximately £333.
Between 51-82% of retail investor accounts lose money when trading forex via spread betting. Currency markets can be highly volatile.
