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   CFD Trading Example (ETF)

As with traditional share dealing, CFD prices are quoted as a Bid (the price you can sell at) and an Offer (the price you can buy at).  With CFD trading you buy a CFD based on a certain amount of the underlying asset. The following worked examples show how you can use CFDs to trade a number of different markets. These examples show trades that result in both profits and losses.


CFD trading example (ETF) on BMF Pro - Buying SPDR (SPY)

You believe that the shares of SPY will rise, so you decide to buy a CFD based on 2000 shares. Boston Merchant Financial quotes you a spread of $84.68/$84.70 for SPDR (SPY).

  OPENNING TRADE  
  Price of SPY is $84.70     84.70
  Number of underlying shares   2,000
  Value of total position (US$)    169,400
  Transaction Fee @ $.24 per share   480
  Margin requirement @ 20% ($)   33,880


After 2 days the market has risen and you decide to close your position.

  CLOSING TRADE (2 days later)  
  Price of SPY is $86.75     86.75
  Number of underlying shares   2,000
  Value of total position ($   173,500


  PROFIT (loss) ON TRADE  
  Closing value ($)   173,500
  Opening value ($)   169,400
  Gain on position ($)   4,100
  Total transaction Fee $   (480)
  Overall profit on trade ($)   3,620