CFD trading example

Your open position

You now hold a short position of 1,000 OSI CFDs with a value of $15,990

Two days later you see that Oil Sands Inc has fallen to 15.48/15.49. This would mean that your previous assumption that the price would go down was right.

Closing the position

The market falls 50 cents to 15.48/15.49. You choose to buy at 15.49 and realize your profit.

50 cents x 1,000 CFDs = $500 gross profit.

The commission charge of 1 cent x 1,000 CFDs = $10, will apply to the closure of the trade as well as the opening, equalling a total of $20.00

You held the position for two days which means you incurred two nights financing charge.

This equals $15,990 (value of the position) x 85% (the amount borrowed) x CORRA (Canadian Overnight Repo Rate Average) - 2.5% (in this instance CORRA is 1% so 1% - 2.5% = - 1.5%) /360 (number of days in the year) x 2 (number of days position is held) = $1.13

CORRA - 2.5% is the overnight rate at which CMC Markets calculates short positions in Canadian equities. To calculate financing on equities from alternative countries use the corresponding country’s overnight lending rate i.e LIBOR in the UK. Short positions will incur a charge based on the financing rate when the financing rate is negative and will receive a financing credit if the applicable overnight financing rate is positive (greater than 2.5%).