I noticed a while ago spread betting companies let you buy and sell currency pairs and many of them allow you to select which currency you want to use for each pip value.

With many spread betting firms you can have pips in GBP. Assuming I am fully understanding everything, this theoretically creates a 'risk free' arbitrage opportunity. If price moves to 1.

Now let's see what happens if price moved to 2. So as you can see, no matter which direction the forex pair goes, you stand to gain.

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These calculations do not factor in the spreads. The further price moves from the starting point, the greater the profit.

The arbitrage opportunity arises because with spread betting you often get the opportunity to open a trade and have the pip values in the base currency the first currency in a pair. All retail FX brokers have the pip values priced in the quote currency the second currency in a pair.

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With spread betting you have the opportunity to have the pip values in GBP. Unlike retail FX with spread betting you don't open a set position size, you just select how much you would like to bet per pip movement. Margin requirements vary between brokers, but some only require margin for the maximum potential loss.

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Best Time to Day Trade the EUR/USD Forex Pair

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