POUNDS to DOLLARS

magnidec

I want to change a fairly large amount of Sterling into Dollars (not holiday spending money) soon, when the rate picks back up a little. Any recommendations on which is the best company/medium to use. Banks are usually quite a lot lower than the TV quoted exchange rates.

Any advice much appreciated.

rich0148

when the rate picks up a little! The pund Vs the dollar is at its highest for years, changing now MAY be an option as waiting COULD see a drop.

deemy2004

You could keep your £'s in a sterling account recieving high interest rates, then use a spot FX broker to open a short position on the £ of an equal amount.

I.e. Oanda.com

This is the most cost effective way as your talkign about a 4 pip spread i.e. 0.0211% as against say 2.5% typically charged.

Personally, I think its a little early to say that the dollar bear market is over... Were barely off 5% from the peak. Wheras recent corrections have ranged more than 10%, with the trend remaining intact.

Saying that I don't take big long-term currency positons, but rather day trade both sides depending on which direction gets triggered first, with tight exit limits achievable within 24hrs.

Walletwatch

You could keep your £'s in a sterling account recieving high interest rates, then use a spot FX broker to open a short position on the £ of an equal amount.

And by when are you required to cover these positions?

deemy2004

Positions are automatically rolled over every day.

Each day you pay or recieve interest depending on the interest rate differential between the two currencies, so for a LONG £, you would recieve interest for a Long dollar you would pay interest.

Also you would cover the margin if the position goes against you which is the same as the movement against you on holding dollars should the £ rally on a long dollar position.

Like I say this is position trading which is in effect is what the person was enquiring about i.e. taking out a long-term dollar position, with low spread on buying / selling and very easy to liquidate.

mgr1970

Just don't go to HSBC when the $ was $1.92 last week they caught me out with a rate of £1 = $1.85 a seven point spread.

deemy2004

Yeh ridiculous !!

Your actual spread is 14 !  - 1400 pips not 700 !

My buying and selling price on the £/$ cross at the present is 18775 to sell and 18779 to buy = 4 pips

The banks rip you off - Just look at how much profit they have built in , 1400 pips !!! when the interbank spreads are even tighter - say 2 pips or less !!!

magnidec

Thank you very much for taking the trouble to reply to my question. Most of you sound as if you're in the money markets professionally, unfortunately you're using a language I don't remotely understand.
I agree the high street banks will hit me with a dreadful exchange rate, which is what I want to avoid. What I'm asking WHO or WHICH COMPANIES? can I approach who will offer me an exchange rate that is as close to the daily quoted price as possible.
When I said "rate picks up a little" I meant - hopefully goes back toward it's 1.95 high from it's current 1.87
Thanks again to everyone for your help.

rp373

Am I right to assume that you physically want to exchange the currency. If this is the case than someone like Onado will be no good, they provide a margin trading service and you will still need to use a bank or a commercial forex broker.

Try someone like

https://www.hifx.com
https://www.isxfx.com
https://www.moneycorp.com

also if anyone is interested in margin trading than you can do a lot better than 4 pip spread.

true interbank spread in 1pip and sometimes also choice. If you use a market maker (bucket shop), they will add 2/3 pips to the spread.

Try using Hotspot FX they are active in the interbank market and provide a true brokerage service.

deemy2004

yeh, 1 pip if your an institution or trading large positions.
What matters can you trust the broker / market maker

Last thing you want is a REFCO ! The behaviour of the broker with regards orders i.e. stops and slippage are far more important than the promise of a 1 - 3  pip spread, as you get what you pay for !

NO problem with Oanda whatsoever, have 100% faith, 95% of the orders have NO slippage , another okay broker is CMC (UK). Also with Oanda you control the position size absolutely, so good for beginners / newbies i.e. risk upwards of a few cents per trade.

There are a lot of brokerages to avoid ! and the good ones are few and far between.

Okay, okay this should be for an FX board.........  :-X

magnidec

Thank you all once again.
To rp373
Yes I want to purchase something in USA later this year,(approx £75K) so was hoping to take advantage of the good rates at present circa US1.95 to £1.
I've recently opened a US bank account to receive the money when I convert it, so I'm just trying to understand the best ways to convert the money and send it to USA. The downside of converting at a good rate and holding it in USA is the interest rates. 0.3% in US compared with 5%+ in UK.
Ah well, can't win them all

I'll investigate the sites you guys have recommended.

Many thanks to all for your time and assistance.