Profit and loss
To calculate the profit or loss earned from a CFD trade, you multiply the deal size of the position (total number of contracts) by the value of each contract (expressed per point of movement). You then multiply that figure by the difference in points between the price when you opened the contract and when you closed it.
Profit or loss = (no. of contracts x value of each contract) x (closing price - opening price)
For a full calculation of the profit or loss from a trade, you’d also subtract any charges or fees you paid. These could be overnight funding charges, commission or guaranteed stop fees.
Say, for instance, that you buy 50 FTSE 100 contracts when the buy price is 7500.0. A single FTSE 100 contract is equal to a £10 per point, so for each point of upward movement you would make £500 and for each point of downward movement you would lose £500 (50 contracts multiplied by £10).
If you sell when the FTSE 100 is trading at 7505.0, your profit would be £2500.
2500 = (50 x 10) x (7505.0 - 7500.0)
If you sell when the FTSE 100 is trading at 7497.0, your loss would be £1500.
-1500 = (50 x 10) x (7497.0 - 7500.0)