CFD DMA Examples

Example: placing a long trade on DBS

Say DBS Group Holdings Ltd is trading on the SGX at 14.47/14.48.

On the Deal Ticket you can see the market depth prices of orders to buy and sell.

Judging from the weight of existing orders, you decide to place an order to buy 1000 shares outside the market spread at 14.45.

Your Deal Ticket is accepted and appears in the Orders to Open panel:

As you are trading outside the spread rather than buying at an immediately available price, there is no guarantee your order will be filled.

As soon as there is sufficient market liquidity at your buying level, the order will be filled and we take a parallel position in the underlying market to reflect your new position. As soon as the order is filled at your price, the trade will appear in your Open Positions panel in our trading platform.

You now have a position in 1000 DBS shares at 14.45.

Example: placing a long trade on Barclays

You have read news about the UK stock Barclays plc, which is trading on the FTSE® at 577-578, and are considering taking an interest.

You use L2 Dealer to view the full market depth of orders to buy and sell this stock.

After considering the existing orders displayed through level two access, you place an order to buy 10,000 shares inside the market spread at 577.5.

Your deal ticket is accepted and the order appears on the order tracking screen.

At first, your order sits waiting to be filled, then it is later filled and your CFD position is opened when the market moves to your order level. Naturally, there’s no guarantee that your order will be filled. With our L2 Dealer, you are able to cancel a live order from the order tracking screen at any time.

You would now hold a position in 10,000 Barclays plc shares at 577.5, opened at 10% margin. In this respect, your initial deposit would have been £5775 (calculated as 10,000 shares x 577.5 x 10%).

Closing your position

Barclays plc stock rises in price over the course of the next day, and you decide to sell. Our L2 Dealer reveals sufficient demand in the form of buying orders in the market for you to sell 10,000 shares at 583, a price you are happy with, so you place an order to sell.

Your order is matched and your CFD position closed, securing a gross profit of 583 - 577.5 x 10,000 shares = £550 on the trade.

Your overall, net profit would take into account the commission charged on your CFD trade and any interest and dividend adjustments there may have been on Barclays plc stock overnight, while you held an open CFD position on the stock.