The foreign exchange asset class is the most traded in the world. Foreign exchange trading is used by investors and traders to either hedge against the change in the movement of two currencies, or alternatively speculate on the direction of fluctuations in the exchange rate of currencies.
ASX provides investors with exposure to a number of currency pairs such as the AUD/USD through Exchange Traded Funds (ETFs), RBS MINIs and Call and Put trading warrants. All of these products allow investors to trade both rising and falling exchange rates.
RBS MINIs are a currency tracking product that provide investors with leveraged exposure to a number of currency pairs. RBS MINIs are similar in nature to CFDs as they do not have an expiry date and track the underlying currency on a one for one basis.
They also contain an in built stop loss to ensure you cannot lose more than your initial outlay.
Currency MINI longs give traders leveraged exposure to the Australian Dollar (AUD) rising against a selected currency. Conversley Currency MINI shorts give traders leveraged exposure to the AUD falling against a selected currency.
There are six currency pairs that can be traded through an RBS MINI:
View the Currency MINIs factsheet (PDF 340KB)
Call and Put Trading Warrants
Call and put warrants are similar in nature to exchange traded options. The key difference between a call and put warrant and an exchange traded option is that the terms are set by a warrant issuer as opposed to the ASX.
Call and Put currency warrants allow investors to gain leveraged exposure to the Australian Dollar rising or falling against the US Dollar on or before a particular date.
They offer exposure to an underlying currency by giving you the right to exchange an amount of foreign currency for Australian dollars on or before the expiry date.
Call and Put Currency warrants are available over the AUD/USD currency. One currency warrant provides exposure to AUD $10.00.
More about Call and Put currency warrants (PDF 198KB)
Currency Exchange Traded Funds (ETFs)
Currency ETFs can provide investors with the opportunity to gain exposure to the performance of selected foreign currencies. Currency ETFs are non-leveraged and are generally lower in cost when compared to holding a foreign currency account with a bank.
Currency ETFs are available over the Australian / United States dollar (ASX code is USD), Australian / British Pound (ASX code POU) and the Australian / Euro (EEU).
More about Currency ETFs
More about Currency ETFs