CFD Trading Examples

Case study of profiting LONG trade

A customer is bullish on XYZ index-component share and decides to buy (LONG) 15000 lots of XYZ share at $2.30. The customer can alternatively trade XYZ share CFDs. Assume CFD margin requirement for XYZ is 10% with leverage of 10 times. (Minimum example commission of $25 for CFD or shares).

CFD Trading Examples - Education Market CFDs Trading Long trade

Day 1, XYZ close @ $2.35
Day 2, XYZ close @ $2.40
Investor closes out at $2.50 on Day 3.

Calculations

  CFD Stocks
Initial Capital $3,450 $34,500
Opening Contract Value Capital x leverage level
= $3,450 * 10
= $34,500
Capital x leverage level
= $34,500 * 1
= $34,500
Quantity Contract Value / Price
= $34,500 / $2.30
= 15,000 shares
Contract Value / Price
= $34,500 / $2.30
= 15,000 shares
Opening @ $2.30:    
Opening Commission (w 7% GST) Contract Value * Commission
= $34,500 * 0.20% * 1.07
= ($73.83)
Contract Value * Commission
= $34,500 * 0.28% * 1.07
= ($103.36)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($34,500 * 0.04% * 1.07) + ($34,500 * 0.0075% * 1.07)
= $14.77 + $2.77
= $17.54
Position closed on Day 3    
Finance Charges
(Day 1)
Price * Quantity * FC rate / 365
= $2.35 * 15,000 * 5.5% / 365
= ($5.31)
NA
Finance Charges
(Day 2)
Price * Quantity * FC rate / 365
= $2.40 * 15,000 * 5.5% / 365
= ($5.42)
NA
Total Finance Charges Day 1 FC + Day 2 FC = ($5.31) + ($5.42)
= ($10.73)
NA
Closing @ $2.50:    
Closing Contract Value Price * Quantity
= $2.50 * 15,000
= $37,500
Price * Quantity
= $2.50 * 15,000
= $37,500
Closing Commission (w 7% GST) Contract Value * Commission
= $37,500 * 0.20% * 1.07
= ($80.25)
Contract Value * Commission
= $37,500 * 0.28% * 1.07
= ($112.35)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($37,500 * 0.04% * 1.07) + ($37,500 * 0.0075% * 1.07)
= $16.05 + $3.01
= $19.06
Net Profit / (Loss) [(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Total Finance Charges
= [(|$2.50 – $2.30|) * 15,000] – $73.83 – $80.25 – $10.73
= $2,835.19
[(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Clearing & Access Fees
= [(|$2.50 – $2.30|) * 15,000] – $103.36 – $112.35 – 17.54 – $19.06
= $2,747.68
  Return on Equity (%)
= 82.03%
Return on Equity (%)
= 7.96%

Case study of losing LONG trade

Day 1, XYZ close @ $2.35
Day 2, XYZ close @ $2.40
Investor closes out at $2.10 on Day 3.

Calculations 

  CFD Stocks
Initial Capital $3,450 $34,500
Opening Contract Value Capital x leverage level
= $3,450 * 10
= $34,500
Capital x leverage level
= $34,500 * 1
= $34,500
Quantity Contract Value / Price
= $34,500 / $2.30
= 15,000 shares
Contract Value / Price
= $34,500 / $2.30
= 15,000 shares
Opening @ $2.30:    
Opening Commission (w 7% GST) Contract Value * Commission
= $34,500 * 0.20% * 1.07
= ($73.83)
Contract Value * Commission
= $34,500 * 0.28% * 1.07
= ($103.36)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($34,500 * 0.04% * 1.07) + ($34,500 * 0.0075% * 1.07)
= $14.77 + $2.77
= $17.54
Position closed on Day 3    
Finance Charges (Day 1) Price * Quantity * FC rate / 365
= $2.35 * 15,000 * 5.5% / 365
= ($5.31)
NA
Finance Charges (Day 2) Price * Quantity * FC rate / 365
= $2.40 * 15,000 * 5.5% / 365
= ($5.42)
NA
Total Finance Charges Day 1 FC + Day 2 FC = ($5.31) + ($5.42)
= ($10.73)
NA
Closing @ $2.10:    
Closing Contract Value Price * Quantity
= $2.10 * 15,000
= $31,500
Price * Quantity
= $2.10 * 15,000
= $31,500
Closing Commission (w 7% GST) Contract Value * Commission
= $31,500 * 0.20% * 1.07
= ($67.41)
Contract Value * Commission
= $31,500 * 0.28% * 1.07
= ($94.37)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($31,500 * 0.04% * 1.07) + ($31,500 * 0.0075% * 1.07)
= $13.48 + $2.53
= $16.01
Net Profit / (Loss) [(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Total Finance Charges
= [(|$2.10 – $2.30|) * 15,000] – $73.83 – $67.41 – $10.73
= ($3,156.97)
[(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Clearing & Access Fees
= [(|$2.10 – $2.30|) * 15,000] – $103.36 – $94.37 – $17.54 – $16.01
= ($3,231.28)
  Return on Equity (%)
= (91.51%)
Return on Equity (%)
= (9.37%)

Case study of profiting SHORT trade

Client is bearish on XYZ and decides to short sell 18000 lots of XYZ share at $1.00. He can trade stocks using Shares Borrowing and Lending (SBL) or use CFDs to ‘short-sell’ XYZ CFD for 3 calendar days. Assuming margin requirement for XYZ is 10% with 10 times leverage.

Education Market CFDs Trading Short Trade

Day 1, XYZ close @ $0.95
Day 2, XYZ close @ $0.90
Investor closes out at $0.90 on Day 3.

Calculations

  CFD Stocks (SBL)
Initial Capital $1,800 $6,000
Opening Contract Value Capital x leverage level
= $1,800 * 10
= $18,000
Capital x leverage level
= $6,000 * 3
= $18,000
Quantity Contract Value / Price
= $18,000 / $1.00
= 18,000 shares
Contract Value / Price
= $18,000 / $1.00
= 18,000 shares
Opening @ $1.00:    
Opening Commission (w 7% GST) Contract Value * Commission
= $18,000 * 0.20% * 1.07
= ($38.52)
Contract Value * Commission
= $18,000 * 0.28% * 1.07
= ($53.93)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($18,000 * 0.04% * 1.07) + ($18,000 * 0.0075% * 1.07)
= $7.70 + $1.44
= $9.15
Position closed on Day 3    
Finance Charges (Day 1) Price * Quantity * FC rate / 365
= $0.95 * 18,000 * 8.0% / 365
= ($3.75)
Price * Quantity * FC rate / 365
= $0.95 * 18,000 * 8.0% / 365
= ($3.75)
Finance Charges (Day 2) Price * Quantity * FC rate / 365
= $0.90 * 18,000 * 8.0% / 365
= ($3.55)
Price * Quantity * FC rate / 365
= $0.90 * 18,000 * 8.0% / 365
= ($3.55)
Total Finance Charges Day 1 FC + Day 2 FC
= ($3.75) + ($3.55)
= ($7.30)
Day 1 FC + Day 2 FC
= ($3.75) + ($3.55)
= ($7.30)
Closing @ $0.90:    
Closing Contract Value Price * Quantity
= $0.90 * 18,000
= $16,200
Price * Quantity
= $0.90 * 18,000
= $16,200
Closing Commission (w 7% GST) Contract Value * Commission
= $16,200 * 0.20% * 1.07
= ($34.67)
Contract Value * Commission
= $16,200 * 0.28% * 1.07
= ($48.54)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($16,200 * 0.04% * 1.07) + ($16,200 * 0.0075% * 1.07)
= $6.93 + $1.30
= $8.23
Net Profit / (Loss) [(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Total Finance Charges
= [(|$0.90 – $1.00|) * 18,000] – $38.52 – $34.67– $7.30
= $1,719.51
[(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Total Finance Charges – Clearing & Access Fees
= [(|$0.90 – $1.00|) * 18,000] – $53.93 – $48.54– $7.30 – $9.15–  $8.23

= $1,672.85
  Return on Equity (%)
= 95.53%
Return on Equity (%)
= 27.89%

Case study of losing SHORT trade

Day 1, XYZ close @ $0.90
Day 2, XYZ close @ $0.95
Investor closes out at $1.10 on Day 3

Calculations 

  CFD Stocks
Initial Capital $1,800 $6,000
Opening Contract Value Capital x leverage level
= $1,800 * 10
= $18,000
Capital x leverage level
= $6,000 * 3
= $18,000
Quantity Contract Value / Price
= $18,000 / $1.00
= 18,000 shares
Contract Value / Price
= $18,000 / $1.00
= 18,000 shares
Opening @ $1.00:    
Opening Commission (w 7% GST) Contract Value * Commission
= $18,000 * 0.20% * 1.07
= ($38.52)
Contract Value * Commission
= $18,000 * 0.28% * 1.07
= ($53.93)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($18,000 * 0.04% * 1.07) + ($18,000 * 0.0075% * 1.07)
= $7.70 + $1.44
= $9.15
Position closed on Day 3    
Finance Charges (Day 1) Price * Quantity * FC rate / 365
= $0.95 * 18,000 * 8.0% / 365
= ($3.75)
Price * Quantity * FC rate / 365
= $0.95 * 18,000 * 8.0% / 365
= ($3.75)
Finance Charges (Day 2) Price * Quantity * FC rate / 365
= $0.90 * 18,000 * 8.0% / 365
= ($3.55)
Price * Quantity * FC rate / 365
= $0.90 * 18,000 * 8.0% / 365
= ($3.55)
Total Finance Charges Day 1 FC + Day 2 FC
= ($3.75) + ($3.55)
= ($7.30)
Day 1 FC + Day 2 FC
= ($3.75) + ($3.55)
= ($7.30)
Closing @ $1.10:    
Closing Contract Value Price * Quantity
= $1.10 * 18,000
= $19,800
Price * Quantity
= $1.10 * 18,000
= $19,800
Closing Commission (w 7% GST) Contract Value * Commission 
= $19,800 * 0.20% * 1.07
= ($42.37)
Contract Value * Commission 
= $19,800 * 0.28% * 1.07
= ($59.32)
Clearing & Access Fees (w GST) NA Clearing Fee + Access Fee
= ($19,800 * 0.04% * 1.07) + ($19,800 * 0.0075% * 1.07)
= $8.47 + $1.59
= $10.06
Net Profit / (Loss) [(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Total Finance Charges = [($1.00 – $1.10) * 18,000] – $38.52 – $42.37- $7.30 < br /> = ($1,885.49) [(Closing Price – Opening Price) * Quantity] – Opening Commission – Closing Commission – Total Finance Charges – Clearing & Access Fees
= [($1.00 – $1.10) * 18,000] – $53.93 – $59.32 – $7.30 – $9.15 – $10.06 
= ($1,939.76)
  Return on Equity (%)
= (104.75%)
Return on Equity (%)
= (32.33%)

Why Choose PhillipCapital?

Expert, Quality Advice

Professional, fully accredited and friendly advisors can help tailor the perfect solution to your needs.

Global Strength and Size

Established in Singapore in 1975, PhillipCapital operates across 16 countries, has over 1 million clients and manages over USD 28 billion assets under management and custody worldwide. You know your investments are safe with us.

Gateway to Americas, Asia and Europe

Expand your investment universe outside of Austraila and reach across the globe. PhillipCapital has access to exchanges across the world.

Speak to an Advisor

Phone Request a Callback:

Phone Toll Free: 1800 214 264

Phone International: +61 3 8633 9800

Website search

Search the PhillipCapital website here.

Request Callback

Fill in the below information and a PhillipCapital representative will call you back as soon as possible.