By ScalperAndy · Posted
By DominicWalsh · Posted
IG | Sitemap | Terms and agreements | Privacy | How to fund | Cookies | About IG
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.
The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.
CFD, share dealing and stocks and shares ISA accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd. IG is a trading name of IG Markets Ltd (a company registered in England and Wales under number 04008957) and IG Index Ltd (a company registered in England and Wales under number 01190902). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. Both IG Markets Ltd (Register number 195355) and IG Index Ltd (Register number 114059) are authorised and regulated by the Financial Conduct Authority.
The information on this site is not directed at residents of the United States, Belgium or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
Question
Guest RollingTape
Hi,
I understand that forward FX spread bets will rollover by default and my preference to have them expire has to be communicated in advance. Assuming that I do so, I want to ask what price will be used to settle them. I understand that right now the forward GBP/USD market is a bet on what the rate will be in, say, March 2019 and so it trades at a price that incorporates a discount/premium. However, as we approach March 2019 (and the settling date of this bet) I would expect the price to converge to the actual spot rate, and on the date of settling I would expect there to be no discount/premium anymore as the forces of arbitrage would lead the price to be almost exactly equal to the spot rate on that day.
Are my expectations correct or is there something I should know?
Thanks!
Link to comment
6 answers to this question
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now