CFD Examples

Example of trading with CFDs on Stocks: long position on Telefónica

Position Opening

Suppose that Telefónica is trading at 13.93/13.94 and, given the upward trend in the market, you decide to open a long CFD position (buy) on 2,000 shares at €13.94.

The guarantee margin is 5%, so you deposit €1,394 (€13.94 x 2,000 shares x 5%).

As it is a Spanish company, the €10 Flat Rate of commissions is applied to this operation, so the cost of opening your position is €10.

Position closing

After a few days, Telefónica is at 14.75/14.76 and you decide to close your position of 2,000 shares at €14.75 and pocket the profit.

For closing, the flat commission rate of €10 is also applied.

The profit of the operation will be as follows:
Closing price €14.75
Opening price €13.94
Difference €0.81
Profit: €0.81 x 2,000 shares = €1,620

Please note that to calculate the total profit of the transaction you should also consider the commission you have paid as well as adjustments for interest and dividends.

Forex CFD Trading Example: Long EUR/USD

Position Opening

It is January 16 and you decide to open a long (bullish) position in the Euro against the Dollar, hoping that the European currency will appreciate.

Our quote is 1.3294/1.3296 and you buy 5 contracts (the equivalent of €500,000) at 1.3296. The value of your position is €500,000 x 1.3296 = $664,800.

To open this position you have to make a deposit of 1% of your position, therefore the required amount will be: 1% x $664,800 = $6,648.

Position closing

On February 8, the EUR/USD quote reaches 1.3346/1.3348 and you close your position of 5 contracts at 1.3346.

The profit of the operation will be as follows:
Close €500,000 (5 contracts) x 1.3346 = $667,300
Opening €500,000 (5 contracts) x 1.3296 = $664,800
Profit $2,500

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To calculate the total benefit of the transaction you must also take into account the interest adjustments.

Example of trading with CFDs on Indices: long position on Spain 35

Position Opening

Given the bullish behavior of the Ibex 35, you decide to operate with a bullish position (long). The index quoted by IG Markets, Spain 35, is based on the Ibex 35.

Let’s imagine that Spain 35 stands at 8152/8160. You decide to buy 1 contract, for which a guarantee deposit of €550 will be required.

The value of the contract per point is the profit that you would obtain for each point that the Spain 35 moves, in this case with the purchase of a contract you would earn €10 for each point that the sale price of said index increases above the original purchase price, 8160 points. In the same way, you will lose €10 for each point that the Spain 35 drops. There is no extra commission for the operation with indices, all the cost is included in the spread or trading fork.

Position closing

After a few days, the index is at 8584/8592. You sell the contract to 8584.

The profit of the operation will be as follows:
The profit of the operation will be as follows: Closing level 8584
Opening level 8160
Difference 424
Profit: 424 points x 1 contract x €10 per point = €4,240

To calculate the total result of the operation, you must also take into account the adjustments for interest and dividends.

Commodities CFD Trading Example: Long Spot Gold

Position Opening

At the beginning of the year you expect a rise in the price of gold. Our quote is 1754.7/1755.2, and you decide to buy 2 contracts at 1755.2 (a 100 ounce contract equals $100 per full point). In this operation you will not pay any commission since the entire cost is in the range.

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Position closing

A week later, the price of gold has risen and our quote is 1795.1/1795.6. You decide to take your profit, and sell the 2 contracts at 1795.1.

The profit of the operation will be as follows:
Closing level 1795.1
Opening level 1755.2
Difference 39.9
Profit: 2 contracts x $100 per point x 39.9 points = $7,980 would be your profit on this trade.

To calculate the total result, you should also take into account the interest adjustments.

Example of Buying an Elastic Option on the Ibex 35

On February 12, you buy an Elastic Option on the Ibex 35 at 3:15 p.m. The futures of the American indices are positive and you think that, after Wall Street opens at 3:30 p.m., the Ibex 35 will rise.

At 3:15 p.m., the Ibex is trading at 8,180 points. At that time, we see on the platform a Buy Elastic Option (bullish), which is trading at 8185 – 8189, with a Floor level of 8160. We buy our Elastic Option at 8189 points. The margin of guarantee is the potential loss, in this case €290 (8189 – 8160).

30 minutes later, the negative opening of Wall Street caused the Ibex 35 to fall below 8,160, reaching a minimum of 8,118 points at 4:15 p.m. Upon passing 8160 points, your Elastic Option is frozen, ensuring you do not lose more than that level.

At 5:00 p.m., the market recovered, breaking through the level of 8,160 points on the upside. At that point, your Elastic Option is reactivated. At 5:15 p.m., the market crosses the entry price of 8189. From that level, you would already have a profit and therefore you can close your position if you wish. Instead of undoing the option, you decide to hold it until expiration at 5:35 p.m. The Ibex 35 closes at 8225 points, your position is closed and you make a profit of €360.

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Example of Binary Option trading: the Spain 35 index rises at the close

The Ibex 35 has had a quiet day and, with 20 minutes to go until the end of the trading day, it is 24 points below its previous closing level. However, you believe that the market can recover before the end of the session and close in positive numbers.

Our price for “Spain 35 rises at close” is 0-2, and you decide to buy 2 contracts at a quote of 2 points, the bid price. Each contract equals €10 per point, so the amount you are risking is limited to €40. In the following 20 minutes, the Spain 35 recovers significantly and at 17:29 CET it is just a few points below its previous closing level. A few minutes later, after the closing auction, the official closing level is made public: 3.2 points above the previous closing level. Although you only risked €40, you have pocketed a profit of almost €2,000.

Profit of the operation
Closing level 100
Opening level 2
Difference 98
Profit: 98 x 2 contracts x €10 = €1,960

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