probably a daft question!

[plake79]

Hi guys,

Ive got one of those questions that will probably make me look a bit stupid, but as the saying goes - "the only stupid question is the one you dont ask!"

So here goes.... If I bought NZD/USD i would benefit from the interest rate differential, so could i use spread betting account to short the same pair as a hedge? therefore just picking up the interest on the long position without risk of the price diving on me.


thanks!

 

[gc1]

No, because the SB company will charge you a daily rollover charge (for daily bets) or adjust the forward price (for a futures bet) and that will cost you more than anything you could earn by holding NZD (or any other main currency).