Probably a stupid question!

Hi all,

I have been thinking and want to know how the following works!..
My account currency is in GBP. If I go long on GBPUSD then I’m buying GBP and selling USD.
Surely though, the net position would be 0pips (-spread) because the broker would have to convert my initial GBP to USD to then sell the USD and buy back GBP?
Can someone clarify this as it obviously doesn’t work like this!

Thanks

If you make 100 pips in GBP/USD standard lot position that means you’ve made $1000. If you had a USD account that would of course be the end of it. Since you have a GBP account the profit gets converted to GBP. Say the rate is 1.60. That means a GBP625 profit.

Also, my understanding is that your account would just remain in GBP currency until you make a withdrawal. That means the value would always be figured at the prevailing GBP rate while in the account. The same thing happens with USD-denominated accounts (at the prevailing USD rate).

I suppose one logic could be this: if you felt long-term bearish on the dollar but long-term bullish on the pound, then it would make sense over the long term to have a GBP-denominated account.

Thanks guys