Opening the position
Buying 10,000 shares in Vodafone
Vodafone price 113.91p
Buy Quantity 10,000
Ticket Value £11,391
Commission £17.08 (0.15%)
Funds to initate position
(5% of ticket value
+commission) £586.63
Closing the position
To close the position you have to sell the same quantity as you have bought.
Here's how to close out the position
Vodafone price 120,23p
Sell Quantity 10,000
Ticket Value £12,023
Commission £18.03
(0.15%)
CFD financing* £33.74
Total costs £68.85
Profit on trade £563.15
Total Funds required £638.40
*CFD Financing is the cost to trade on leverage on overnight positions. This is calculated at LIBOR + 3%.
Therefore:
10,000 x 113.91p x 7.75% = £882.80 / 365 days = £2.41 per night. The above trade was held for 14 nights therefore CFD financing comes in at £33.74
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.
