Trade at the market price and pay just an initial deposit to open your position, plus a small commission. It's that simple...
Opening the position
On 29 April 2009 our quote for Keppel Land is $1.67/1.68. You expect Keppel Land to rise and buy 1,000 shares as a CFD at $1.68, the offer price. The margin rate on this particular stock is 15%, so your initial outlay is just 15% x 1,000 shares x $1.68 = $252. The same outlay with a remisier would only give you exposure to the performance of 150 shares.
Our standard commission rate on a Singapore share trade is just 0.2% or $3.36 (1,000 shares x $1.68 x 0.2%) (see Contract Details). While your position remains open, your account is debited to reflect interest adjustments and credited to reflect any dividends.
Closing the position
By 11 May 2009, Keppel Land has climbed to 2.95/2.96 in the market and you decide to take your profit. You sell 1,000 shares at $2.95, the bid price. The commission on this transaction is 0.2% or $5.90 (1,000 shares x $2.95 x 0.2%).
Your gross profit on the trade is calculated as follows:
Your gross profit on the trade is calculated as follows:
Profit
| Closing level | $2.95 |
| Opening level | $1.68 |
| Difference | $1.27 |
Profit: $1.27 x 1000 = $1,270
To calculate the overall result on the transaction you would also have to take into account the commission you have paid and the interest and dividend adjustments. The Detailed Example includes these charges and adjustments.
*Please note that trading CFDs is a geared investment strategy, carrying a high risk to your capital. Only trade with money you can afford to lose. Please see our Risk Warning for more details.