Leveraging is even better - only dumb people don't do it.
Lets look at it
I short aud - lets say I buy 100 aud @ 95c todays price
I sell this and hope dollar drops
Ooops it goes up to $1.05c - I have to meet the sale or margin call.
oops - don't tell the wife...
I buy back the 100 units of dollars at 105 cents = $105
I return the 100 units to the person I borrow from plus pay him a fee for borrow (perhaps 5% p.a.)
and therefore I've made - $10 (- $105 + $95) plus 5% fee = lets say $12 for every 100 units
Lets say I've leveraged out (I leverage because I'm a smart dude not like other idiots who don't leverage) to 1,000 units = 1,000 X $12 = $12,000 payable immediately.
Or if I was really smart I would have leveraged out to 5,000 units - so I'm up for $60,000. Now.
Ring bank re line of credit on house.
Ooops sorry- ring estate agent re selling house.
Wonder if those suits and shoes would bring much on ebay.
Think of way to approach wife with news.
Look up caravans for rent on site at Cranbourne