CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
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ETP CFD examples

Buy

'Buying' SPDR S&P/ASX 50 Fund

You believe Australian stocks are going to rise. You decide to trade an ETF CFD, SPDR S&P/ASX 50 Fund, listed on the ASX, which provides exposure to over 50 companies in Australia.

In the morning, the buy price for SPDR S&P/ASX 50 Fund is 40.56, and you buy 1000. Instead of putting up the full value of the shares ($40.56 x 1000), you only need to supply a deposit of 10% or $4056.

Following the release of positive Australian manufacturing data, our buy price for SPDR S&P/ASX 50 Fund stands at 41.02 and you decide to take your profit.

Profit on trade
Opening level 40.56
Closing level 41.02
Difference 0.46
Profit on trade: 0.46 x 1000 = $460

 

You calculate the overall result by taking into account the interest and dividend adjustments, and the commission you paid.

 

However, you would have made a loss that may have exceeded your initial deposit, had the market moved in the opposite direction.

Sell

'Selling' SPDR S&P/ASX 50 Fund

You decide to trade an ETF CFD, SPDR S&P/ASX 50 Fund, because you believe Australian stocks are set to fall.

Our price for SPDR S&P/ASX 50 Fund stands at 40.52 in the morning, and you sell 1,000 shares at the bid price. Instead of putting up the full value of the shares (40.52 x 1000), you only need to supply a deposit of 10% or $4052.

Following the release of positive Australian manufacturing data, our sell price for SPDR S&P/ASX 50 Fund at midday stands at 40.87 and you decide to cut your losses and close your position.

Loss on trade
Opening level 40.52
Closing level 40.87
Difference 0.35
Loss on trade: 0.35 x 1000 = $350

 

You would also have to take into account the interest and dividend adjustments, plus commission you have paid to calculate the overall result on the transaction.

 

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CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.