Hedging foreign currency exposure using spread betting

[Odysseus]

You need to buy GBP/USD at 21p per pip. Why could you not buy GBP/USD at £1.21 per pip, and then sell GBP/USD at another site for £1 per pip, meaning your total exposure is buying 21p per pip? or is it not as simple as that?

Should work in theory but you would need to worry about the amount of money you need in the two accounts for your margin, not one.
Also a lot of forex SB firms don't let you bet fractional stakes, usually whole units or standard parts.

[Odysseus]

Early days for me that was. Hedging = waste of time and ties up more of your float. Also, impossible to adjust your position due to the min bet sizes.

Some operate an entire foreign currency float. Personally don't agree that is best.

My approach is to limit exposure by keeping as much of my float in base currency - that means all exchanges and base books are in GBP.

I did it last year when I had between $10 and 20k US float and was hitting lots of books. Don't bother now as my float is probably less than $10k and can't find the time to do as many.
I still think it's a good idea as it focuses your mind on the "value" of your $s in GBP terms and as Munk implies above, if your $s have a bad run and weaken substantially, you will be sitting on a profitable GBP/USD trade. As these forex rates tend to fluctuate and eventually revert to the mean, it might be worth taking your profit and waiting for the USD to strengthen again before taking out another hedging position.

[Odysseus]

Has anybody found anywhere that offers extended minimum 10p per pip?

For anyone interested in doing this, Gekko Global Markets, (www.ggmarkets.com), offer lowish minimum bet sizes. I think GBP/USD is 20p for the rolling and around 15p for the future.
They also have a juicy looking SUB and RAF but the T&C are so onerous you will only see the bonus in your hand if you do a lot of trading.
I haven't used them for trading yet but tried a trial account, it worked well and seemed fine.