Spread bet vs forex carry trade correlations


Experienced member
1,136 25
I'm looking at some correlations between the stock market and carry trade pairs for possible hedging.

Normally if you wanted to buy the stock market then 1 contract on the stock market would be 1 x $50 x 1067 = $53,350
So, what people do in the carry trade is borrow $53,350 in yen, convert it to dollars and buy the stocks. So, they would borrow 53,350 x 87yen = 4,641,450 yen.
The correlations in the markets are closely linked to AUDJPY and EURJPY.
So, If I wanted to hedge by selling the stock market and buying the FX pair would I then convert the 4,641,450 yen into AUD to work out how much to buy?
4,641,450 / 76.5 = AUD60,672
Since 1 lot = 100,000 units, this would be 1 contract on the ES to 0.6 FX lots.
Is this calculation correct?

Now to complicate things, how do I do the same calculation when wanting to do this on a spread betting platform?


Experienced member
1,136 25
Is the calculation above correct?
Could simplify the question by saying how many units on the SNP 500 = # units on the AUDJPY FX pair?
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