Example: Buying Wall Street

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It is half an hour before the close of trading and the underlying index is standing 15.5 points below the previous day's official settlement price. You think the market will rally before the close and end up on the day.

We quote a variety of Binaries with different targets for the net change of the daily settlement price of Wall Street. Our price for the market to finish between unchanged and up-20 points (0/+20) is 6.8 - 9.5.

You decide to buy 5 contracts at 9.5, the offer price. Each contract is worth USD10 per point. So you are risking 9.5 x 5 contracts x USD10 = USD475. You also know that, should the underlying index indeed finish up on the day, your position will be worth 100 x 5 contracts x USD10 = USD5000.

This represents a potential return of over 1000%, decided in the next thirty minutes.

Ten minutes later, Wall Street has rallied and is up 2.5 points on the day. Our quote for the 0/+20 Binary is now 53.2 - 56.2. You decide to take your profit rather than risk waiting for the settlement price. You close the position at our bid price of 53.2.

Profit

Closing level 53.2
Opening level 9.5
Difference 43.7

Profit = 43.7 x 5 contracts x USD10 = USD2185

With transparent trading costs, share CFDs available at the guaranteed market price, one of the lowest financing rates around, and segregated client funds, IG Markets is Singapore's number one CFD provider for customer satisfaction. IG Markets offers forex trading and CFDs on all the leading Asian and international shares in local denominations, as well as a range of stock indices, including the Singapore Blue Chip. Exclusive to IG Markets is our selection of SGD-Denominated CFDs, which eliminate currency exposure when trading foreign stock indices. We also offer a range of research and analysis resources to keep you up-to-date with the latest market news.

Remember that CFDs are a leveraged product and can result in losses that exceed your initial deposit. Trading CFDs may not be suitable for everyone, so please ensure that you fully understand the risks involved.

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