Shorting the pound means betting that the British currency will decline in value relative to other currencies. Traders can make profit by doing this if their expectations are correct. To short the pound meaning, traders must use a broker that offers contracts-for-difference (CFDs) on the Forex market. In order to do so, they must open a Forex account and then borrow pounds from their broker in the expectation that the currency will fall in value. If they are right, they will buy the currency back at a lower price and return it to their broker with profit.
What is 1000 pounds called?
The British currency is called a pound because it originally weighed 240 silver pennies. It is now a symbol of the British economy, and many traders like to trade it because it tends to be positively correlated with the Australian dollar and New Zealand dollar. However, correlations can be misleading and you should always consider the fundamental factors behind each pair before trading.
Investors were spooked about the U.K.’s economic outlook as it grappled with negative GDP at the same time as interest rates and inflation surged higher. That’s why a bet that the currency would depreciate was a good idea, even if many onlookers disagreed with the logic. Soros’ conviction in the trade drove him to push Druckenmiller to lever up his position and put billions on the line. And the rest is history.