Interest rates trading

To trade interest rates, you need to follow these five steps.

1. Open a trading account. Getting a City Index account is free and usually takes minutes
2. Add some funds, so you can start trading interest rates immediately
3. Choose the interest rate market that you want to trade and decide whether to go long or short on it
4. Decide how much you want to risk on your position, and set up your stop loss and take profit orders accordingly
5. Execute your order

If the interest rate market moves in your chosen direction, you’ll make a profit. If not, you’ll make a loss. You can also trade interest rates with zero risk using our free demo trading account.

Trading interest rates means opening a short or medium-term position that makes money if rates rise (if you’re long) or fall (if you’re short). Interest rate trading is based on the prices of interest rate futures, which reflect where the markets expect rates to head next.

As with any form of trading, you’ll earn a profit if the underlying market moves in your favour, and a loss if it moves against you. Many traders use interest rates as a ‘safe haven’ market to protect their portfolio against volatility.

Learn more about how to trade interest rates.

With your City Index account, you can trade CFDs or spread bet on three short-term interest rate markets: short sterling, Eurodollar and Euribor. All come with margin of 20% and spreads starting at just 0.02 points.

Learn more about interest rate CFDs or spread betting on rates.