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Quote (bid/offer) 0.7500/04

Buy Price 0.7504

Volume A$100,000

Initial Outlay (1% margin) A$1,000

In the example above you have purchased A$100,000. But because FX is traded on margin with CMC Markets you will only need A$1,000 (1%) to maintain the same market exposure.

The risk on this AUD/USD trade is equivalent to US$10 per each point movement. Each point is valued at 0.0001. For example if the AUD/USD rate moves from 0.7504 to 0.7505 you will receive a profit of US$10.

Your prediction is correct and the Australian Dollar appreciates against the US Dollar. The quote on AUD/USD is now 0.7590/94. To close your position, you decide to SELL A$100,000 @ 0.7590 (the bid price).

Quote (bid/offer) 0.7590/94

Sell Price 0.7590

Volume A$100,000

Profit/Loss US$860 Profit

Your profit and loss is usually calculated in the secondary currency. Therefore the above AUD/USD trade profit/loss is calculated in US Dollars. With CMC Markets no brokerage or commission charges will be subtracted from your gross profit. You will only be charged a financing cost if you hold your position overnight.

Profit/loss Calculation:

Size of trade x (sell price - buy price) = profit & loss USD

100,000 x (0.7590 - 0.7504) = US$860 profit

Or, converting the US$860 back to A$ at a rate of 0.7590