Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. This warning extends to various financial markets, including Forex and currency pairs like EUR/AUD.
Professional clients trading spread bets and CFDs can lose more than they deposit, a crucial point to remember when considering leveraged trading in pairs such as EUR/AUD.
Options and futures are also complex instruments which carry a high risk of rapid losses due to leverage. They are not suitable for all investors, especially those new to trading EUR/AUD or other volatile currency pairs. Before investing in options or futures related to currencies, it’s vital to understand their mechanics, the inherent risks, and whether you can withstand losses exceeding your initial investment.
Trading stocks and shares ‘on margin’ within a US options and futures account adds another layer of risk. Financing only a portion of a security’s cost amplifies potential losses, possibly beyond your initial investment. This concept applies if you were to trade instruments related to currency values or baskets including EUR/AUD. Margin trading also incurs extra costs and may restrict your shareholder rights and access to your securities until the trade is settled. Thorough understanding of margin trading risks is essential before engaging in it.
The value of shares, ETFs and other ETPs can fluctuate, meaning investments made through share dealing accounts, US options and futures accounts, stocks and shares ISAs, or SIPPs are subject to market risk. This principle holds true for investments linked to currency markets, where the value of pairs like EUR/AUD can rise and fall. Past performance is not indicative of future results. Certain ETPs may have unique risks based on their structure, requiring investors to be well-informed before investing.
Share dealing and IG Smart Portfolio accounts are provided by IG Trading and Investments Ltd, while CFD accounts and US options and futures accounts are offered by IG Markets Ltd, and spread betting by IG Index Ltd.
IG is a trading name for IG Trading and Investments Ltd, IG Markets Ltd, and IG Index Ltd, all registered in England and Wales with registered addresses at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. These entities are authorized and regulated by the Financial Conduct Authority in the UK.
It’s important to note that information provided is not aimed at residents of the United States, Belgium, or any country outside the UK and is not intended for distribution or use in jurisdictions where such distribution or use conflicts with local laws or regulations. This global regulatory landscape is relevant for all trading activities, including those involving EUR/AUD and other Forex pairs.
Understanding the volatility of currency pairs like EUR/AUD is paramount for any trader. The Forex market is influenced by a multitude of factors, from economic indicators to geopolitical events, making it inherently risky. Before engaging in trading any currency pair, especially with leveraged products, ensure you are fully aware of these risks and have a robust risk management strategy in place.
