Forex Spot is the most traded market in the world with a daily turnover of around 1.5 trillion dollars! Spot basically translates to "now". So if you were to trade it, you would be buying or selling a pair at the price it is right now and would own the currency you were buying (although not physically, this would be completely impractical, it's all electronic). Futures are very different. When trading any future you are not actually buying the base product (currency in our case), you are buying a contract. This contractual agreement is a little like asking someone to reserve a sofa you like for 3 months at a set price, you put a deposit down but contractually you must (are obligated) pay for it at the end of the 3 months. The idea is that if you think the price of the sofa (currency) will go up, you buy the contract (guaranteeing a set price for 3 months). If you’re right the price of the sofa will have gone up in value and you profit from the difference by selling on the contract or the sofa. Options are very similar to futures with the exception that you are not obligated to buy the “sofa” at the end of the 3 months (in this circumstance you just lose your “deposit”) also the contracts can vary in length. When spread betting one can trade just like the spot, future or options market but you never actually own the currency or contract, instead you place a bet with a financial bookmakers (a “Corals” for finance). The bets you place with them unlike a regular bookie, are open, meaning you can alter them just like a trade (you can add to, reduce or close your bet whenever you want). The major benefit to spread betting is that all winnings are tax free (because it is gambling). There’s no right or wrong method, just choose what suits your needs. If you only have limited funds it might be best to spread bet (but always with a stop, otherwise your losses are limitless!), as the minimum deposit and trade sizes are considerably smaller than other types of accounts.
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