Australian Dollar/US Dollar Spread Betting Guide
Where to Spread Bet on Australian Dollar/US Dollar
You can trade FX spread betting markets such as Australian Dollar/US Dollar with spread betting companies like:
How to Spread Bet on Australian Dollar/US Dollar
If you decide to spread trade on a foreign exchange pair such as the Australian Dollar/US Dollar then, looking at a spread betting website like Capital Spreads, at the time of writing you would find a spread betting price of $0.8900 – $0.8903.
This means you could spread trade on the Australian Dollar/US Dollar to move above $0.8903 or below $0.8900.
When spread trading, you bet on every unit the market increases or decreases; in the case of the Australian Dollar – US Dollar market a unit is $0.0001 of the forex pair’s price movement.
So, you could choose to bet £2 for every $0.0001 the Australian Dollar/US Dollar moves up or down.
Spread Betting on the Australian Dollar/US Dollar Market to Go Up
If you bought the Australian Dollar/US Dollar at $0.8903 and the forex pair rose then the spread could become $0.8956 – $0.8959. If that were to happen, you might decide to close your bet for a profit by selling at $0.8956.
Profit or Loss = (final price of the market – opening price of the market) x stake per $0.0001
Profit or Loss = ($0.8956 – $0.8903) x £2 per $0.0001 stake
Profit or Loss = $0.0053 x £2 per $0.0001
Profit or Loss = £106 profit
Conversely, if the market had decreased to, for example, $0.8858 – $0.8861, you could choose to close your trade to limit your losses. If that happened, you would sell at $0.8858.
With the same £2 per $0.0001 stake:
Profit or Loss = (final price of the market – opening price of the market) x stake per $0.0001
Profit or Loss = ($0.8858 – $0.8903) x £2 per $0.0001 stake
Profit or Loss = -$0.0045 x £2 per $0.0001
Profit or Loss = -£90 loss
Spread Betting on the Australian Dollar/US Dollar Market to Go Down
A key benefit of placing a spread trade is that investors can short the markets.
At the beginning of this example, the spread was $0.8900 – $0.8903.
If you were to go short of the Australian Dollar/US Dollar at $0.8900 and the forex pair decreased then the spread could change to $0.8849 – $0.8852. Therefore, you could decide to take your profits by closing your spread bet at $0.8852.
Profit or Loss = (opening price of the market – final price of the market) x stake per $0.0001
Profit or Loss = ($0.8900 – $0.8852) x £2 per $0.0001 stake
Profit or Loss = $0.0048 x £2 per $0.0001
Profit or Loss = £96 profit
Markets can also rise, if the market increased to $0.8937 – $0.8940, you could choose to close your spread bet to limit your losses. Assuming this was the case, you would buy back at $0.8940.
Therefore, with the same £2 per $0.0001 stake:
Profit or Loss = (opening price of the market – final price of the market) x stake per $0.0001
Profit or Loss = ($0.8900 – $0.8940) x £2 per $0.0001 stake
Profit or Loss = -$0.0040 x £2 per $0.0001
Profit or Loss = -£80 loss
Australian Dollar/US Dollar Rolling Daily spread betting prices quoted as of 27-Aug-10.
FX Spread Betting Guide
- Where can I Spread Bet on FX Markets?
- Where can I find Real-time Spread Betting Prices for FX Markets?
- Where can I find Live Charts / Candlestick Charts for FX Markets?
- How do you Spread Bet on FX Markets to Go Up?
- How do you Spread Bet on FX Markets to Go Down?
Spread Betting carries a high level of risk to your capital and you can lose more than your initial investment, it may not be suitable for all investors. Ensure you only speculate with money that you can afford to lose and that you fully understand the risks involved and seek independent financial advice where necessary.
