Play the biggest market in the world

As Greek debt woes continue, the euro has been taking a battering. So too has sterling as investors wonder whether a sovereign debt crisis could hit the UK next. Many investors saw this coming Greek public finances and accounting are notoriously suspect so how can you take advantage?

Enter currency spread bets. Remember that currencies always move relative to each other as one falls, another rises (or at least falls at a different rate). So this type of bet offers a fast, cheap way to bet on the direction of one currency against another using a currency "pair".

Take the EUR/USD pair. It can be easily traded via a broker such as IG Index along with a host of other currency combinations. If you buy the pair, you are placing an upbet on the Euro against the USD. For a downbet you would sell the pair. You will need to decide up front on a price per "tick" or "pip". This determines how much you win or lose. So if you buy the pair at a price of, say, 1.3585 (€1 = $1.3585) at $10 per pip and the rate moves to 1.3700, you could close the bet and take out a 115 pip profit, or $1,150.

Start your trial of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.