GBP is the currency of the United Kingdom, and one of the most popular currencies for Forex traders to short. short the pound involves betting on the currency’s value falling against other currencies, most commonly the US Dollar. Like all currencies, the pound’s value can be influenced by a range of factors. This article will explore some of the risks and rewards of shorting GBP, and how to trade this market with a spread bet or CFD.
What is 1 pound called?
A short position on a currency pair is made up of a ‘base’ currency and a ‘quote’ currency. When you go long (buying), you are buying the base currency and selling the quote currency. If the quote currency rises against the base currency, you make a profit. The reverse is true for a short position.
Spread bets and CFDs are leveraged financial products that give you a speculative wager on an underlying asset’s price movements without owning the asset. They are also highly transparent and offer tight spreads with no hidden fees. Whether you want to trade a single currency or an entire FTSE 250, spread bets and CFDs are tax efficient ways to speculate on the markets.
Several times per month, the UK releases economic data that can impact the pound’s value. Traders can use these data releases to trade the pound, and we recommend trading 30 minutes before or one to three hours after the release to maximise your profits.