Spread betting on interest rates has traditionally been one
of the more specialist spread betting markets but has seen an upsurge in
popularity given the recent spate of interest rate cuts across the world.
As well as offering the long term markets such as the UK
Long Gilt, Spreadex offers short term money market contracts including Short
Sterling (UK interest rates), Eurodollar (US interest rates - nothing to do
with Europe or the Euro!) and Euribor (European interest rates)
Although they can be very confusing at first glance, they
really are quite simple to understand and place a spread bet on. If the Short
Sterling mid price is 98.94, that equates to an interest rate of 1.06% (100 –
98.94). If you think rates will rise you would sell the contract and if you
think they will fall you would buy. But bear in mind that these can be very
slow moving markets and you may have to hold a position for many months to see
a return.