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Example CFD Trades
To help you understand how CFD trading works, here are two example trades:
Equity CFD - Example 1
Day 1: Tesco is trading at 410-410.30. You decide to buy 1000 Tesco CFDs.
| Contract | Buy / Sell | Quantity | Price (p) | Trade Value | Margin Requirement (5%) |
| Tesco | Buy | 1000 | 410.30 | £4,103.00 | £205.15 |
You hold the position for 1 night and are therefore charged 1 day's financing.
| Overnight financing rate | Value Of Position | Financing Charge |
| 7.00% (GBP LIBOR +2%) | £4,103.00 | £0.79 |
Day 2: Tesco is trading at 430-430.30. You decide to sell the position you're holding.
| Contract | Buy / Sell | Quantity | Price (p) | Trade Value | Margin Requirement (5%) |
| Tesco | Sell | 1000 | 430.00 | £4,300.00 | £215.00 |
Trading Summary
| Product | Buy / Sell | Quantity | Price | Value |
| Tesco | Buy | 1000 | 410.30 | £4,103.00 |
| Tesco | Sell | 1000 | 430.00 | £4,300.00 |
| Trade profit / loss | £197.00 | |||
| Finance charge | -£0.79 | |||
| Total profit / loss | £196.21 |
Index CFD - Example 2
Day 1: FTSE 100 Index is trading at 6000/02. You decide to sell 10 FTSE CFD.
| Contract | Buy / Sell | Quantity | Price | Trade Value | Margin Requirement (1%) |
| FTSE | Sell | 10 | 6000 | £60,000.00 | £600.00 |
You hold the position for 1 night and therefore receive 1 day's financing.
| Overnight financing rate | Value Of Position | Financing Income |
| 3.00% (GBP LIBOR -2%) | £60,000.00 | £4.93 |
Day 2 FTSE 100 Index is trading at 6048/50 and you decide to close the position.
| Contract | Buy / Sell | Quantity | Price | Trade Value | Margin Requirement (1%) |
| FTSE | Buy | 10 | 6050 | £60,500.00 | £605.00 |
Trading Summary
| Product | Buy / Sell | Quantity | Price | Value |
| FTSE | Sell | 10 | 6000.00 | £60,000.00 |
| FTSE | Buy | 10 | 6050.00 | £60,500.00 |
| Trade profit / loss | -£500.00 | |||
| Finance charge | £4.93 | |||
| Total profit / loss | -£495.07 |
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