FX is the largest financial market in the world, with $3 trillion traded globally every day. Indeed, growth in FX trading has outpaced that of equities. Today, in the UK alone, there are estimated to be more than 50,000 FX trades placed per day by retail traders. The majority of these trades are spot FX trades, where clients speculate on the price movement of one currency against another, say Sterling/US dollar or US dollar/Japanese Yen.

This unprecedented growth amongst private investors has come about for three main reasons:

• New technology – which has made the types of trading platforms and tools previously reserved for institutional trading desks available to retail traders
• Globalisation – we live in a truly globalised economy, where investors have a stronger grasp on how currencies, interest rates and inflation all interact and affect the value of money
• Investor sophistication – investors are increasingly looking beyond traditional equity markets and asset classes to tools that compliment their trading strategies. This is evident in the growth of CFDs, Spread Betting and Warrants in recent years.

FX advantages

In reality, movements in currency markets can be relatively small. For private investors looking to participate in the FX market, however, this is not a problem. Our new FX trading platform will offer leverage up to 100 times the initial commitment, so for a £1,000 deposit you could open a £100,000 position. Clearly, such leverage needs to be managed very carefully. While it creates the opportunity for profits, it also exposes investors to significant losses.

Aside from the clear advantages (and disadvantages) of trading on leverage, there are a number of compelling reasons that you should consider FX trading:

• It gives you access to a 24 hour market, so you can trade at the times when you feel there is the most profit to be made
• It gives you asset class diversification and has relatively low correlation to other asset classes
  You are not charged commission on any trades you place
• You can profit in rising and falling markets
• You can’t lose more than the funds within your account (although you can lose all of your initial investment if the currency moves opposite to the way you thought it would).

Our new FX account and platform will combine the power of Barclays Capital – market leaders in institutional FX trading – and Barclays Stockbrokers, and provide you with all the tools, pricing and service capability you need to take on the FX markets.

If you want to find out more about the great new FX trading platform and see examples of FX trading in action, just view our online FX seminar. And then look out for the next Smart Investor Update email for more information on our FX platform and an official launch date in March.

For further information on FX email or call us on 0845 300 9050*