Speculating on a Recovery of the Pound

Q. How do I bet on the Pound recovering?


A: Well, with spread betting taking this is relatively straightforward. For instance, if you thought that the doomsayers were exaggerating the demise of the pound and you thought that a recovery was due for the pound, you could buy, say the GBP/USD June spreadbet (time of writing is April) with a stop loss order just under the recent lows.

These were around 1.4800, so you could work a stop loss order at around 1.4750. Currently, the June spreadbet is 1.5180 to buy, so with a stop loss order at 1.4750 this means 430 points of risk [which works out to £215 if trading at the minimum 50p per point]. If GBP/USD then recovers in the next few weeks back to the early February highs up at 1.6000, this would represent 820 points of gains or £410 at 50p per point. Of course, the trade can be closed at any point before the end of June.

 ...Continues here - How to Get Exposure to the Yen

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