What is an Australian Dollar Denominated CFD?
When you trade a CFD, your stake is initially calculated in the currency of the market you trade. As an Australia based trader, your stake size per point on a GER30 position, for example, is calculated in Euros and your final profit or loss is then converted in Australian Dollars.
To make your trading easier, a ThinkMarkets account allows you to trade the six most popular stock index CFDs directly in Australian Dollars. No need to worry about currency rates and conversion fees anymore. Simply trade your favourite markets in your home currency.
How AUD Denominated CFDs benefit you
- Avoid currency rate fluctuations, exposure and conversion fees
- Trade overseas markets in your home currency
- Stake your trades more easily and avoid unnecessary FX exposure
- Trade from as low as A$0.10 per point movement
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AUD Denominated CFDs – Trading example
Let's assume that you think that the UK stock market will climb. ThinkMarkets quotes a two-way price for the UK100 index CFD of 7209 / 7210.
You decide to buy one contract of the AUD denominated UK100 CFD at the offer price of 7210 (1 AUD denominated CFD on the UK100 = A$1 per point movement in the index price)
As you are trading the UK index in Australian Dollars, your initial deposit is easy to calculate:
Market level 7210
x
1 Contract (A$1)
x
Deposit Factor 0.5%
=
Initial Margin A$36.05
After a few days, the market rises and you decide to close the position and take your profits.
ThinkMarkets now quotes a two-way price for the UK100 index of 7322/7323.
If you didn’t have access to an AUD Denominated contract for UK 100, the exposure of the above trade would be in pound sterling (GBP). With an AUD denominated UK100 CFD, no currency conversions or FX exposures occur and your real stake and profit or loss can be quickly calculated.
Sell Price 7322
-
Buy Price 7210
=
Points Profit 112
x
1 Contract (A$1)
=
Profit A$112
Note: The above is a simplified example and does not account for overnight interest or any dividend adjustments
AUD denominated CFDs available at ThinkMarkets
For full details on our product offering, please visit our contract specifications page
here
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