Ok here goes:
I seen a while ago spread betting firms let you buy and market pairs and several allow you to choose which currency you need to use for each pip value. By way of instance if you open a long GBP/USD pip worth with brokers would be in USD. Together with spread betting companies you can have pips in GBP.
Assuming I'm fully understanding everything, This theoretically produces a risk free arbitrage opportunity.
Let me clarify:
Say in this stage in time, GBP/USD is $2.
In the event that you marketed 100k GBP/USD using a regular broker and buy GBP/USD using a spread betting company for5 percent pip, no matter which way the market moved, you would gain.
If price moves to 1.85 in the upcoming few months, The short GBP/USD position with the standard broker would be$15000. The spread position that is long would be-7500.
Should we look at the two position in Pound terms we have this:
GBP/USD long #-7500
GBP/USD short $15000/1.85 (the speed at the time) = #8108
This would cause a gain of608.
Now lets see what happens if cost moved to 2.15 instead:
The extended would be#7500
The short would be$15000
Lets convert both rankings into Pounds:
We have 7500 and$15000/2.15=#6976
This would cause a gain of #524
So as you can see, no matter what cost does, you win. These calculations do not variable in the spreads etc.. I dont think any FX plan is 100% risk free, agents slide orders especially during the news, agents can go bankrupt etc etc..
I've used this egy for a couple months on the GBP/JPY with some fantastic results.
The additional cost moves from the starting point, the larger the profit. When GBP/JPY dropped 9, it was excellent in July.