Buying ABC Plc
You believe that company ABC Plc’s shares will
rise, so you decide to buy a CFD based on 2000 shares.
City Index quotes you a spread of 860/861 for
ABC Plc.
Opening trade:
| Price of ABC Plc
(cents) |
861 |
| Equivalent number of underlying shares |
2000 |
| Value of total position ($) |
17,220.00 |
| Commission @ 0.3% ($) |
51.66 |
| Margin requirement @ 20% ($) |
3,444.00 |
Closing trade (3 days later):
| Price of ABC Plc (cents) |
892 |
| Equivalent number of underlying shares |
2000 |
| Value of total position ($) |
17,840.00 |
| Commission @ 0.3% ($) |
53.52 |
Profit on trade:
| Closing value ($) |
17,840.00 |
| Opening value ($) |
17,220.00 |
| Profit ($) |
620.00 |
| Commission ($) |
(105.18) |
| Overall profit on trade ($) |
514.82 |
The above trade equates to a
14.94% profit on the initial outlay (514.82/3,440.00), given a
share price movement of 3.6%.
As you hold a long position financing will be
automatically debited from your account every night for the period
that you hold your position.
Financing is calculated as a percentage of the value of your
position, and is charged daily and applied overnight. Further
information on financing can be found in the Market Information Sheets.