Selling the US TECH 100
You believe that the US TECH 100 will fall so
you decide to sell a CFD based on 50 underlying futures contracts
for that market.
City Index quotes you a spread of 1890/1894
for the US TECH 100.
Opening trade:
| Price of US TECH 100 (US$) |
1890 |
| Equivalent number of underlying contracts |
50 |
| Value of position (US$) |
94,500.00 |
| Commission |
n/a |
| Margin requirement @ 5% (US$) |
4,725.00 |
After 20 days the market has risen and you
decide to close your position.
Closing trade:
| Price of US TECH 100 (US$) |
1909 |
| Equivalent number of underlying contracts |
50 |
| Value of position (US$) |
95,450.00 |
Loss on trade:
| Opening value (US$) |
94,500.00 |
| Closing value (US$) |
95,450.00 |
| Loss on position (US$) |
(950.00) |
| Commission |
n/a |
The above trade equates to a 20.10% loss on
the initial outlay (950/4,725), given a share price movement of
1%.
As you held a short position financing would
also have been automatically credited to your account every night
for the period that you held your position open.
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.