Using Spreadbetting for potentially long term FX investment

[elliot.baker.eb]

Could someone point out any flaws in this plan, it occurred to me after I read in someones thread a while ago that if they had either very wide or no stop losses then every bet/trade they made last year would have been profitable.

Putting a long bet on GPB/USD (for example) with a stop loss at £1=$1, which I am taking to be so unlikely as to be nearly impossible. That's about 2000pips away at the moment. The aim would be to make only 10% in less than a year, bearing in mind 2 weeks ago this pair was 200pips higher, this could happen in a matter of days or weeks.

Having read about the interest charges for daily funded/rolling bets I would use the quarterly bets which I gather have a broader spread. I don't have an account at the moment (I never have) so I don't know how wide the spreads are on the quarterly bets but I am presuming they are not in the 100s of pips?

I would be considering this "an investment" rather than a "bet", with the thinking being that even if it took 2 years to make 10% that would be 5% per annum "interest" which is better than any bank account.

I haven't thought about what I would do if it made me 10% in a matter of weeks, i.e. would I let it go further up or bet the other way. I haven't decided.

Many thanks for any advice/input people wish to offer.

 

[tomorton]

There are always one big problem with long-term investments - nobody knows the future. This gets worse the further into the future we're talking about.

 

[Signalcalc]

You need to work out the costs for holding a long term bet, other options could be to 'invest' in an equivalent ETF and depending on level of capitalisation whether you would use a leveraged ETF. For an ETF then holding in an ISA or SIPP would provide the tax free benefit equivalent to SB.

Just compare the costs. Hargreaves Lansdown are good for looking at ETFs, examples are:

LGBP
GBPP
LGB3