CFD trading examples
CFD trading is straightforward – if you think
a market will rise you buy (go "long"), and if you think it will
fall you sell (go "short").
As with traditional share dealing, CFD prices
are quoted as a Bid (the price you can sell at) and an Offer (the
price you can buy at). With CFD trading you buy a CFD based on a
certain amount of the underlying asset.
The following worked examples show how you can use CFDs
to trade a number of different markets. These examples
show trades that result in both profits and losses.
1) A CFD index trade
Selling the US TECH
100
You believe that the US TECH 100 will fall so you decide to
sell CFD contracts based on 50 underlying futures
contracts for that market ...
2) A CFD equity trade
Buying ABC Plc
You believe that company ABC Plc’s shares will rise, so you
decide to buy a CFD based on 2000 shares ...