Thread: Spot VS Futures

Hi,

On various spreadbetting platforms, you have the option of trading pairs as either spot or futures.

Eg:
GBPUSD Rolling Daily Forward 1.6792 / 95
GBPUSD Forward Dec09 1.6786 / 94

Why would you sell 86's when you can sell 92's?

I can't work out what it is that i'm missing...

Thanks

because of rollover costs you fag

The fwd trade in IG is the FX fwd for delivery some time in Dec09... The difference between spot and fwd is determined by the cost of carry on the position, which is in turn implied by interest rate parity. By doing the fwd you're forgoing the carry for the spot - Dec09 period.

Originally Posted by ArabiaBawbag

because of rollover costs you fag

thanks for your input.

Originally Posted by Martinghoul

The fwd trade in IG is the FX fwd for delivery some time in Dec09... The difference between spot and fwd is determined by the cost of carry on the position, which is in turn implied by interest rate parity. By doing the fwd you're forgoing the carry for the spot - Dec09 period.

Thanks martin. I sort of get it now. I'll do some searching/reading and try and get some examples of the carry costs applied by SB's to rolling spot positions...

Originally Posted by noshoulders

Thanks martin. I sort of get it now. I'll do some searching/reading and try and get some examples of the carry costs applied by SB's to rolling spot positions...

I got a spreadsheet from them on how they compute the cost of the roll and what their charges are for different products.

Originally Posted by arabianights

because of rollover costs you fag

we are a welcoming community here at propboards



but having said that..... you really should know this difference between spot and futures if you actually do trade prop.......


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do you even trade prop?

Originally Posted by TRON

we are a welcoming community here at propboards



but having said that..... you really should know this difference between spot and futures if you actually do trade prop.......


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do you even trade prop?

He does, yes. That's why I felt allowed to call him a fag

As you were....