ETFs are investment funds that are traded on equity exchanges in a similar fashion to stocks. We offer hundreds of tradable ETFs; below you can see an example ETF CFD trade.
Buying SPDR Gold Trust
As the name suggests, the SPDR Gold Trust ETF tracks the value of gold bullion. With IG you are guaranteed to trade at the market price on all share CFDs, and this includes ETF CFDs too.
Opening the CFD position
It is March and you think the price of gold is set to rise. You choose to open a position on SPDR Gold Trust which, being an ETF, is traded like an equity. On March 24 the ETF is trading in the market at $107.45-107.47. You buy 200 shares at $107.47, putting down a margin deposit of 10%, $2149.40.
Closing the CFD position
As you predicted, gold’s value improves and you see your ETF rise in value. By May 12 the SPDR Gold Trust is trading at $120.88-120.90 and you choose to sell and close your CFD position.
You close your position at $120.88 and your gross profit is calculated as follows:
Profit on trade
Profit: $13.43 x 200 = $2686
To calculate your net position you would have to take into account the commission on the trade, plus any overnight funding charges.
To see the wide range of ETFs we offer, visit our ETFs Contract Details.
CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial investment, so please ensure that you fully understand the risks involved.