Examples of trading with CFDs

When trading CFD Your profit or your losses are calculated by the difference between the purchase price and the selling price of the instrument with which you trade. Remember that prices are always quoted with the selling price on the left and the purchase price on the right.

Example: Buy ABC plc
In this example, ABC plc is listed at € 15.99 / 16.00. Assume you want to buy 1,000 CFDs on shares (units) because they think that its price will rise. ABC plc has a 5% margin, this means that it is only required to deposit 5% of the value of the position. In this example, the margin to open a position will be equal to € 800 (5% x (1.000 (units) x € 16,00 (price)). Note that if the price moves against you, you can lose more the initial margin deposit of € 800

Scenario A: operation into profit
Your prediction was correct and the price has gone up over the next hour to € 16.25 / 16.26. You decide to close your position by selling at 16.25 (the current selling price).
The price has moved 25 cents (16.25 to 16.00) in your favor. Multiplying this number by the size of your position (1,000 units) you get a profit of € 250.

Scenario B: losing trade
Unfortunately, your prediction was wrong and the price of ABC plc fell over the next hour up to 15,49 / 15,50. Do you think the price will continue to decline, therefore, to limit your potential losses, you decide to sell at 15.49 (the current selling price) to close your position.
The price has moved 51 points (16.00 to 15.49) against you. Multiplying this number by the size of your position (1,000 units) you get a loss of € 510.

Example: Buy ABC plc
In this example, ABC plc is listed at € 15.99 / 16.00. Assume you want to sell 1,000 CFDs on shares (units) because they think that the price may fall. ABC plc has a 5% margin, which means that it is only required to set aside 5% of the total value of the position. In this example, the margin to open the position will be equal to € 799.50 (5% x (1.000 x 15.99)).

Remember that if the price moves against you, you can lose more than the initial margin of € 799.50.

Scenario A: operation into profit
Your prediction was correct and the price fell to 15.49 / 15.50. You decide to close your position by buying at € 15.50 (the new purchase price).

The price has moved 49 pence (15.99 to 15.50) in your favor. Multiplying this number by the size of your position (1,000 units) you get a profit of € 490.

Scenario B: losing trade
Unfortunately, your prediction was wrong and the price of ABC plc rose to 16,49 / 16,50. You decide to stop your losses and buy at 16.50 (the new d-purchase price) to close the position.

The price has moved 51 points (16.50 to 15.99) against you. Multiplying this number by the size of your position (1,000 units) you get a loss of € 510.

We remind you that our margin requirements apply only to the net open positions.

Commissions
CFDs on equity has applied a commission for every executed trade. Positions in UK equities are charged at 8 basis points (0.08%) with a minimum fee of € 5 per run.

To determine the amount of commission to be paid, it is necessary to multiply the size of your location to the rate applied.

In the above example of ABC Plc, the commission to open a position will be calculated as follows: 1000 (units) x 16.00 pence (price) x 0.08% = € 12.80.

The commission to close a position will be calculated as follows: 1000 (units) x 16.25 pence (price) x 0.08% = € 13.00.

maintenance costs
If you hold a position open after 17:00 hours New York (Italian 23:00), it will be applied a cost of maintaining, or if the location has a fixed maturity, the fee is incorporated directly into the instrument’s price.

The cost of maintenance is calculated based on the interbank rate in the currency in which the instrument is denominated. For example, the UK 100 index (UK Pounds) is based on the London Interbank Offered Rate (LIBOR) rate. For purchasing operations, we apply a rate of 2.5% over the LIBOR, while for sales transactions, receive LIBOR minus 2.5%, unless the underlying interbank rate is equal to or less than 2.5%. In this case, a sales position provides for a cost of maintenance.