Going for Gold!

Opening position

December Gold is looking relatively cheap at $586.1 bid $586.8 offer and so you decide to buy Gold as a CFD. You decide to buy 10 CFDs at the offer of $586.8.

Here is how the position would open:

Gold Price                        $586.8

Buy Quantity                   10

Ticket Value                     $58,680 (1 CFD has a contract value of 10)

Commission (0.10%)       $58.68            

Funds required               $645.48

(margin + Commission)

Your judgement was correct and you decide to close the position out at 613.12 eight days later.  You have made 26.32 points so for each 0.1 you have made $1. Therefore on this trade you have realised profits of $2632 net commissions.

Here is how you would close out of the position. Remebering you would trade the opposit and of equal value to your opening trade.

Closing position

Gold Price                        $613.12                    

Sell Quantity                    10

Ticket Value                     $61,312 (1 CFD has a contract value of 10)

Commission (10%)          $61.31                 

CFD financing                  None*

Total costs                       $219.66

Profit on trade                $2412.34

*None- Because the position is rolled upon expiry, the price you pay will already incur financing in the contract value.

GTC orders placed on treasury or commodity CFDs are automatically cancelled at 22:00 London Time on the CMC Markets expiry date for the relevant CFD contract.

So on an investment of $645.48 you have realised profits of $2412.34, an ROI of 373%

If the position moves agianst you and you do not have enough funds in your account then you would be required to meet your margin call. Therefore, it is possible to lose more than your initial outlay when trading CFDs and as such they are considered a high risk investment vehicle and are not suitable to all investors.