CFD Trading Example 1: Buying EUR/USD
EUR/USD is trading at 1.18491/1.18508
You decide to buy €100,000 because you think the price of EUR/USD will go up. EUR/USD has a margin rate of 400:1 , which means you have to deposit 0.25% of the total position value as initial margin.
Therefore, in this example your initial margin will be $296.27 (0.25% x [€100,000 x 1.18508]).
The platform will automatically convert the initial margin amount into your account currency at the prevailing BCR conversion rate.
Outcome 1: A Winning Trade
Your prediction was correct, and the price rises to 1.18823/1.18840 .
You decide to close your long trade by selling at 1.18823(the current sell price).
The price has moved 31.5 points (1.18823 – 1.18508) in your favour.
Outcome 2: A Losing Trade
Unfortunately, your prediction was wrong and the price drops to 1.18193/1.18210.
You decide to close your long trade by selling at 1.18193 (the current sell price).
The price has moved 31.5 points (1.18508 - 1.18193) against you.
Your loss is ([€100,000 x 1.18508] – [€100,000 x 1.18193]) = $315
Swap costs
If you hold your position past 22:00 GMT (21:00 GMT US Daylight Saving Time),
your account will be debited or credited at the prevailing swap rate.
For more details on our swap rates, please refer to the ‘Specification’ section for the relevant product on the trading platform.
CFD Trading Example 2: Selling EUR/GBP
EUR/GBP is trading at 0.86157/0.86184
You decide to sell €100,000 because you think the price of EUR/GBP will go down.
EUR/GBP has a margin rate of 400:1 , which means you have to deposit 0.25% of
the total position value as initial margin.
Therefore, in this example your initial margin
will be £215.71 (0.25% x [€100,000 x 0.86157]).
The platform will automatically convert the
initial margin amount into your account currency at the prevailing BCR conversion rate.
Outcome 1: A Winning Trade
Your prediction was correct, and the price drops to 0.86030/0.86057.
You decide to close your short trade by selling at 0.86057(the current buy price).
The price has moved 10 points (0.86157 – 0.86057) in your favour.
Your profit is ([€100,000 x 0.86157] – [€100,000 x 0.86057]) = £100
Outcome 2: A Losing Trade
Unfortunately, your prediction was wrong and the price rises to 0.86230/0.86257.
You decide to close your short trade by selling at 0.86257 (the current buy price).
The price has moved 10 points (0.86257 – 0.86157) against you.
Your loss is ([€100,000 x 0.86257] – [€100,000 x 0.86217]) = £100
Swap costs
If you hold your position past 22:00 GMT (21:00 GMT US Daylight Saving Time),
your account will be debited or credited at the prevailing swap rate.
For more details on our swap rates, please refer to the ‘Specification’ section for the relevant product on the trading platform.
CFD Trading Example 3: Buying AAPL
In this CFD example, AAPL is trading at a sell/buy price
of 122.52/122.67.
Assume you want to buy 100
Shares (1 CFD = 100 shares) because you think
the price will go up.
AAPL has a margin rate
of 10:1, which means that you have to deposit 10%
of the position’s value as initial margin.
The platform will automatically convert the
initial margin amount into your account currency at the prevailing BCR conversion rate.
In this example, your CFD initial margin will
be $1,226.70 (10% x [100 units x 122.67 buy price]).
Outcome 1: A Winning Trade
Your prediction was correct, and the price rises to 129.52/129.67.
You decide to close your long trade by selling at 129.52 (the current sell price).
The price has moved 6.85 points (129.52 – 122.67) in your favour. Multiply this by the size of your positions (100 shares) to calculate your gross profit, which is $685.
Commissions on CFD Trades – The Commissions for each CFD can be viewed on the Trading Platform.
In this instance, the Commission Fee is $20 per lot.
Therefore, your total profit on AAPL is your gross profit minus total commissions.
$685 - $20 = $665 net profit
Outcome 2: A Losing Trade
Unfortunately, your prediction was wrong and the price drops to 117.52/117.67 .
You decide to close your long trade by selling at 117.52 (the current sell price).
The price has moved 12 points (129.52 – 117.52) against you. Multiply this by the size of your positions (100 shares) to calculate your loss, which is $1200.
Commissions on CFD Trades – The Commissions for each CFD can be viewed on the Trading Platform. In this instance, the Commission Fee is $20 per lot .
Therefore, your total loss on AAPL is your gross loss plus total commissions.
$1200 + $20 = $1220 net loss
Swap costs
If you hold your position past 22:00 GMT (21:00 GMT US Daylight Saving Time),
your account will be debited or credited at the prevailing swap rate.
For more details on our swap rates, please refer to the ‘Specification’ section for the relevant product on the trading platform.
CFD Trading Example 4: Selling AAPL
In this CFD example, AAPL is trading at a
sell/buy price of 122.52/122.67.
Assume you want to sell 100 Shares (1 CFD = 100 shares)
because you think the price will go down.
AAPL has a margin
rate of 10:1, which means that you have to deposit 10% of
the position’s value as initial margin.
The platform will automatically
convert the initial margin amount into your account currency at the prevailing BCR conversion rate.
In this example, your CFD initial margin will be
$1,225.20 (10% x [100 units x 122.52 sell price]).
Outcome 1: A Winning Trade
Your prediction was correct, and the price falls to 114.52/114.67.
You decide to close your short trade by buying back at 114.67 (the current buy price).
The price has moved 7.85 points (122.52 – 114.67) in your favour.
Multiply this by the size of your positions (100 shares) to calculate your gross profit, which is $785.
Commissions on CFD Trades – The Commissions for each CFD can be viewed on the Trading Platform.
In this instance, the Commission Fee is $20 per lot.
Therefore, your total profit on AAPL is your gross profit minus total commissions.
$785 - $20 = $765 net profit
Outcome 2: A Losing Trade
Unfortunately, your prediction was wrong, and the price rises to 130.52/130.67.
You decide to close your short trade by selling at 130.67 (the current buy price).
The price has moved 8.15 points (130.67 – 122.52) against you.
Multiply this by the size of your positions (100 shares) to calculate your loss, which is $815.
Commissions on CFD Trades – The Commissions for each CFD can be viewed on the Trading Platform. In this instance, the Commission Fee is $20 per lot.
Therefore, your total loss on AAPL is your gross loss plus total commissions.
$815 + $20 = $835 net loss
Swap costs
If you hold your position past 22:00 GMT (21:00 GMT US Daylight Saving Time),
your account will be debited or credited at the prevailing swap rate.
For more details on our swap rates, please refer to the ‘Specification’ section for the relevant product on the trading platform.
