UK spread bet, buying gold in £

[SanMiguel]

I read an article suggesting to buy gold in £ terms a while back.
Now, most spread betters only offer the gold price in $.
The way to do it is to buy gold in $ and sell and equal dollar amount in the GBPUSD pair.
However, what is an equal $ amount in terms of a spread bet on these 2 instruments?
£1 on GBPUSD is about £15,000 in the market place.
So, would you then buy 15k in gold = 15k divided by gold price of $1250 (£8 per dollar) = £0.8 per pip on gold.
?

 

[scose-no-doubt]

your 15k there is in £ term so convert to $ before sharing by gold price

On that basis you'd probably be better placing your gold stake first so you could work out the £ hedge in exact terms by conversion.

Would only make a few pence difference but I'm a perfectionist lol.

 

[SanMiguel]

your 15k there is in £ term so convert to $ before sharing by gold price

On that basis you'd probably be better placing your gold stake first so you could work out the £ hedge in exact terms by conversion.

Would only make a few pence difference but I'm a perfectionist lol.

So, 1 unit on gold = $1,200
We want to buy in £, so we would have to buy 1200/1.5 = £800 worth of gold.
So, buy £1 per point gold and short £0.66 per point on GBPUSD?

 

[pboyles]

Have you considered how much you are going to lose in spread and swop each day, especially with 2 positions open for what would appear to be the mid to long term?

 

[SanMiguel]

Have you considered how much you are going to lose in spread and swop each day, especially with 2 positions open for what would appear to be the mid to long term?

It would be on the futures contracts.

 

[pboyles]

OK, its just the title is UK spreadbet so I assumed you were spreadbetting

 

[SanMiguel]

Have you considered how much you are going to lose in spread and swop each day, especially with 2 positions open for what would appear to be the mid to long term?

OK, its just the title is UK spreadbet so I assumed you were spreadbetting

Yep, spreadbetting with futures contracts
Or perhaps I should say that the spreadbet companies offer the bet on futures based contracts expiring June, September, etc.

 

[pboyles]

Its all just spreadbetting, they will charge you a spread and a daily rollover charge. They will probably find some other way to get more fees out of you including widening the spread when you try to get out of the trade.

 

[SanMiguel]

Its all just spreadbetting, they will charge you a spread and a daily rollover charge. They will probably find some other way to get more fees out of you including widening the spread when you try to get out of the trade.

No, the financing is included in futures contracts.
The spread does not change.

 

[pboyles]

No, the financing is included in futures contracts.
The spread does not change.

So they will allow you to open your two positions and not charge you any daily rollover and the spread will never widen at any point? Is that what they have said?

 

[SanMiguel]

So they will allow you to open your two positions and not charge you any daily rollover and the spread will never widen at any point? Is that what they have said?

Yep, that's how it works and has been since I started SBing anyway. Oil futures, commodities, FX futures.
For example, gold daily spread is 5pts, rollover works out to near 2.5pts per day. Futures contract is 7pts and that's all you pay until the contract expires depending on which contract you choose.
Same as the CFD contracts essentially.

In my original post, I could also use ETFs like PHPP but that doesn't offer the leverage and most don't offer PHPP to be traded on a spread bet or CFD (or GBSS etc.)