CFD Trading examples


Your profit or loss is determined by the difference between the buy and the sell price of the product that you are trading. Remember that prices are always quoted with the sell price on the left and the buy price on the right.

Example: Buying ABC Inc.
In this example, ABC Inc. is trading at $19.99/$20.00. Assume you want to buy 1,000 share CFDs (units) because you think the price will go up. ABC Inc has a margin rate of 20%, which means that you only have to deposit 20% of the position’s value as position margin. In this example, your position margin will be $4,000 (20% x (1,000 (units) x $20.00 (price)). Remember that if the price moves significantly against you, it is possible to lose more than your initial position margin of $4,000.

Outcome A: Winning trade
Your prediction was correct and the price rises over the next hour to $20.50/$20.51. You decide to close your position by selling at $20.50 (the current sell price).
The price has moved 50 cents ($20.50-$20.00) in your favour. Multiply this by the size of your position (1,000 units) to calculate your profit which is $500.

Outcome B: Losing trade
Unfortunately, your prediction was wrong and the price of ABC Inc. drops over the next hour to $19.50/$19.51. You feel the price is likely to continue dropping, so to limit your potential losses you decide to sell at $19.50 (the current sell price) to close the position.
The price has moved 50 cents per share ($19.50 - $20.00) against you. Multiply this by the size of your position (1,000 units) to calculate your loss which is $500.

Example: Selling ABC Inc.
In this example, ABC Inc. is trading at $20.00/$20.01. Assume you want to sell 1,000 share CFDs (units) because you think the price will go down. ABC Inc. has a margin rate of 20% which means that you only have to put forward 20% of the total position’s value from your own funds as position margin. In this example, your position margin will be $4,000.00 (20% x (1,000 x $20.00)).

Remember that if the price moves against you, it is possible to lose more than you initial position margin of $4,000.00.

Outcome A: Winning trade
Your prediction was correct and the price falls over the next hour to $18.99/$19.00. You decide to close your trade by buying back at $19.00 (the new buy price).

The price has moved one dollar ($20.00-$19.00) in your favour. Multiply this by the size of your position (1,000 units) to calculate your profit which is $1,000.

Outcome B: Losing trade
Unfortunately, your prediction was wrong and the price of ABC rises over the next hour to $20.99/$21.00. You decide to cut your losses and buy back in at $21.00 (the new buy price) to close the position.

The price has moved one dollar ($20.00-$21.00) against you. Multiply this by the size of your position (1,000 units) to calculate your loss which is $1,000.


Commission

CFD share trades attract a commission charge for each trade. US and Canadian share trades cost one cent per share ($0.01) with an $8.00 minimum.

To determine how much commission you would pay, multiply your position size by the applicable commission rate.

In the ABC Inc. example above, the charge to open a buy position would be calculated as follows:
1,000 (units) x $0.01 = $10.00

The charge to close the buy position would be calculated as follows:
1,000 (units) x $0.01 = $10.00


Holding costs

If you hold any position after 17:00 New York time, you will be charged a holding cost, or if the position has a fixed expiry the cost is built into the price of the product.

We calculate the holding rate applicable to the holding cost based on the interbank rate of the currency in which the product is denominated. For example, the Canada 60 (Canadian Dollars) is based on the Canadian Overnight Repo Rate (CORRA). For buy positions, we charge 2.5% above CORRA and for sell positions you receive CORRA minus 2.5%, unless the underlying interbank rate is equal to or less than 2.5%, in which case sell positions may incur a holding cost

You can view the historic holding costs for any product on the trading platform by clicking the product overview.