EUR/USD

Bull Spread Example

The Fed is due to release its latest U.S. economic forecasts, and you expect these to be poor overall, leading to depreciation in the dollar.

The spot EUR/USD rate is the basis for our EUR/USD contracts, and in this example is trading around 1.2985.

CHOOSE MARKET

You think the dollar will depreciate against the euro, in anticipation of disappointing economic forecasts.

You choose to trade our EUR/USD 1.2930-1.3030 (2PM) contract.

Forex Bull Spreads Example

COMPLETE TICKET

You opt to Buy as you think the rate will be above 1.2988 at 2pm.

You select 25 contracts at the offer price of 1.2988. Each pip that the price moves is worth $1.

Your trade's floor and ceiling are 1.293 and 1.303 respectively.

The most you can make is $1050; the most you can lose is $1450.*

MONITOR TRADE

Your position is now open and will expire at 2pm.

The difference between Nadex's calculated expiration value and your opening price of 1.2988 will determine your profit or loss.

  1. Profit

    At 2pm, Nadex's calculated expiration value for EUR/USD has risen to 1.3038.

    This is beyond the ceiling of this trade, so your profit is calculated against the ceiling level of 1.303.

    The difference between your opening price (1.2988) and the ceiling level (1.303) is 42 pips.

    Multiply 42 by the number of contracts (25) and the contract value per pip ($1) to calculate your gross profit.

    42 x 25 x $1 = $1050*

    *Fees apply

  2. Loss

    At 2pm, Nadex's calculated expiration value for EUR/USD has fallen to 1.2921.

    This is beyond the floor of this trade, so your loss is calculated against the floor level of 1.293.

    The difference between your opening price (1.2988) and the floor level (1.293) is 58 pips.

    Multiply 58 by the number of contracts (25) and the contract value per pip ($1) to calculate your gross loss.

    58 x 25 x $1 = $1450*

    *Fees apply

More examples

Bull Spreads

Bull Spreads are simple derivatives suitable for traders looking for high leverage and hedging opportunities. 

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Bull Spreads
Step by Step Guide

An in-depth guide to placing your first Bull Spread trade, from the first step to the last.

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