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What is Spread Trading?

TD365.com offers a trading product called Single Currency Spread Trading. It is easy to use and it is easy to explain how to use it.

Understanding Spread Trading


TD365.com offers a trading product called Single Currency Spread Trading. It is easy to use and it is easy to explain how to use it.

For every financial market instrument in the world, there is a buy price and a sell price. The difference between the two prices is called the spread. Spread trading is a way that you can speculate on many different markets including Global Indices, FX, Commodities, Stocks and even Cryptocurrency without having to take a position in the actual market.

You simply take a contract with a broker like TD365.com where we quote the buy and sell prices of that market.  Our quotes on all our markets mirror the real market.  So, our prices of Gold, for example, will move up and down in line with the market price of Gold.

You provide us with a margin to take out the position (Yes – you don’t even have to provide all the capital), and the difference between where you execute your buy and your sell trades will be your profit or loss.

It’s that simple.

Single Currency Spread Trading


A TD365.com Trading Product

We use the words “Single Currency” to illustrate the point that your trading currency, the one your stake is nominated in, is always the same.

You can select from 7 different “base” currencies, that you can use every time you trade.

For example, if you live in England, you probably want to use British Pounds as your trading currency in all your trades.

However, if you live within the European Union, and your day-to-day currency is Euros, you will probably want to execute all your trades in Euros. If you live in Denmark, then you will probably want to trade in Danish Kroners.

What Does This Mean?


Let us Give You an Example.

Normally, when you trade an instrument, your stake size (what you risk per point movement) will be determined by the currency of the country where the product resides.

Say for example you are trading the UK 100 Index, you are trading a UK product, which will normally be traded in British Pounds.

The problem many people have is understanding their stake size in a foreign currency. Wouldn’t it be nice if you could nominate your stake size in your own local currency, even when you are trading foreign instruments? With TD365.com you can do exactly that.

What TD365.com offers you is the ability to trade say the UK 100 Index in whatever currency you desire. If for example your base currency is Euros, everything you trade on the TD365.com platform will be in Euros, including your UK 100 Index trade.

This eliminates confusion over exchange rates between your base currency and the instrument currency. It also eliminates fees from converting your profits or losses from a foreign currency back to your base currency.

We are, to our knowledge, the only broker in the world that offers this unique service.

Example

Here is a trading ticket of the Wall Street 30 Index.

The price is currently 30,928 – 30,929.

If you want to buy the Wall Street 30 Index, the price is 30,929.

If you want to sell the Wall Street 30 Index, the price is 30,928.

The difference between the two prices is called the “spread”.

Stake Size


The number inside the trading ticket is “10”. What does that mean?

The “10” represents how much you risk per point movement. If for example your account is set up in Euros, then the “10” represents 10 Euros per point movement.

If your account is set up in Danish Kroners, for example, then the “10” represents 10 Danish Kroners per point movement in the UK 100 Index.

It makes trading so much easier when you never have to worry about trading a foreign product in a foreign currency. You are comfortable with your home currency, your base currency, and all your trades will be executed in your preferred currency.

Example

Peter lives in Spain. He likes to trade stock indices such as the Nasdaq index and the SP500 index. He also likes to trade the German DE 30 index and the English UK 100 Index.

He trades with TD365.com and he has decided to trade every trade in EUROS. The trading ticket to the left is the UK 100 Index, which on the TD365.com platform is called UK 100.

When Peter trades “10” per point, he is risking 10 Euros per point. It does not matter that the UK 100 is normally traded in British Pounds.

Peter also likes to trade the Wall Street 30 index.

Even though this index is traded in America, and it normally trades in US Dollars, Peter can now trade it through TD365.com in his own EURO currency.

Beginners & Experienced

Whether you are new to trading or are an experienced trader, you can benefit from Single Currency Spread Trading.

If you are new, you can trade as little as 1 unit of your local currency. So, you can trade as little as 1 Euro or 1 British Pound or 1 Dollar a point.

For the professional trader there is a lot to be gained to trade with TD365.com. You can trade clips of 100 a point in DE 30 and UK 100, 150 in UK 100, and 200 in NASDAQ.

Why is Single Currency Trading
the Smartest Way to Trade?

 

One word sums up Single Currency Spread Trading. Transparency.

You always know how much you are risking because you know your own currency better than any other currency.

You no longer have to worry about the broker applying an unfair exchange rate when he converts your profits or losses back to your base currency.

You no longer have a currency balance on your trading account which will expose you to currency fluctuations.