Spread betting on FOREX currency pairs has been gaining more and more popularity amongst online traders. It offers a lot of flexibility and is thus a preferred way of trading for many people.
Instead of opening a position for a certain transaction value, you choose a stake which represents the value for each pip by which the price moves. You also choose a stop-loss, by which you set how much you are willing to lose. This is your margin deposit. As with futures and spot trading, you can also benefit from falling markets by going short or long. Your profit or loss is equal to your stake multiplied by the number of points by which the price has moved.